full version PDF - Harvard Journal of Sports and Entertainment Law

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Volume 3, Number 1
Winter 2012
Contents
ARTICLES
A Short Treatise on Fantasy Sports and the Law: How America Regulates
its New National Pastime
Marc Edelman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Copyright Termination and Loan-Out Corporations: Reconciling Practice
and Policy
Aaron J. Moss and Kenneth Basin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55
How the Expressive Power of Title IX Dilutes Its Promise
Dionne L. Koller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
103
Transitioning to the NBA: Advocating on Behalf of Student-Athletes for
NBA & NCAA Rule Changes
Warren K. Zola . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
159
NOTE
The Prospects for Protecting News Content Under the Digital Millennium
Copyright Act
Priya Barnes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Harvard Journal of Sports & Entertainment Law
Student Journals Office, Harvard Law School
1541 Massachusetts Avenue
Cambridge, MA 02138
(617) 495-3146; [email protected]
www.harvardjsel.com
U.S. ISSN 2153-1323
The Harvard Journal of Sports & Entertainment Law is published semiannually by Harvard
Law School students.
Submissions: The Harvard Journal of Sports and Entertainment Law welcomes articles
from professors, practitioners, and students of the sports and entertainment industries, as
well as other related disciplines. Submissions should not exceed 25,000 words, including
footnotes. All manuscripts should be submitted in English with both text and footnotes
typed and double-spaced. Footnotes must conform with The Bluebook: A Uniform System of
Citation (18th ed.), and authors should be prepared to supply any cited sources upon
request. All manuscripts submitted become the property of the JSEL and will not be
returned to the author. The JSEL strongly prefers electronic submissions through the
ExpressO online submission system at http://www.law.bepress.com/expresso. Submissions may also be sent via email to [email protected] or in hard copy to the
address above. In addition to the manuscript, authors must include an abstract of not
more than 250 words, as well as a cover letter and resume or CV. Authors also must
ensure that their submissions include a direct e-mail address and phone number at
which they can be reached throughout the review period.
Permission to Copy: The articles in this issue may be reproduced and distributed, in
whole or in part, by nonprofit institutions for educational purposes including distribution to students, provided that the copies are distributed at or below cost and identify
the author, the Harvard Journal of Sports & Entertainment Law, the volume, the number of
the first page, and the year of the article’s publication.
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Volume 3, Number 1
Winter 2012
EDITORIAL BOARD
Editor in Chief
Dave Zucker
Executive Editor
Trisha Ananiades
Executive Editor
Jeffrey M. Monhait
Executive Editor
Miles C. Wiley
Online Editors
Timothy Lamoureux
Austin Stack
Technical Chairs
Cynthia Chen
Brandon Hammer
Symposium Chair
Katie Weiss
Cynthia Chen
Adam Derry
Jenna Hayes
Submissions Committee
Joseph Labaw
Judy Lai
Hunter Landerholm
Shafiq Poonja
Victoria Blohm
Jenna Hayes
Adam Derry
Abraham Funk
Michael McCauley
Yacoba Annobil
Lou Argentieri
John Avila
Peter Byrne
Shasky Clarke
Christopher Davis
Ty Davis
Kelly Donnelly
Mitchell Drucker
Article Editors
Eugene Karlik
Hunter Landerholm
Line Editors
Shafiq Poonja
Daniel Sinnreich
Editors
Sabreena El-Amin
Bukola Eleso
Erica Esposito
Brad Hinshelwood
Meredith Karp
Jesse King
Alana Kirkland
Meg Lenahan
Clint Morrison
Annie Smith
Austin Stack
Katie Weiss
Michael Lieberman
Katie Weiss
Annie Smith
Austin Stack
Paul J. Sullivan
Rachael Moss
Michael Robertson
Liat Rome
Alex Rosen
Kimberly Solomon
McClain Thompson
Michael Waks
Daniel Waldman
Christian Yost
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A Short Treatise on Fantasy Sports and the Law:
How America Regulates its New National Pastime
Marc Edelman1
TABLE OF CONTENTS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II. THE HISTORY OF FANTASY SPORTS LEAGUES . . . . . . . . . . . . . . .
A. Before Fantasy Sports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. A New Game is Created . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. The First Rotisserie League Baseball Auction . . . . . . . . . . . .
D. Rotisserie Baseball Grows in Popularity . . . . . . . . . . . . . . . .
E. The Internet Boom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III. THE FANTASY SPORTS INDUSTRY TODAY . . . . . . . . . . . . . . . . .
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1
Marc Edelman is a member of the faculty at Barry University’s Dwayne O.
Andreas School of Law in Orlando, FL and a summer adjunct professor at Fordham
University School of Law in New York, NY ([email protected]). Professor
Edelman earned his B.S. in economics from the Wharton School (University of
Pennsylvania) and both his J.D. and M.A. from the University of Michigan. While
a law student at the University of Michigan, Professor Edelman founded the fantasy
sports dispute resolution business, SportsJudge.com. In addition, Professor Edelman
has served as a legal consultant to various fantasy sports businesses.
Professor Edelman wishes to thank Amit Schlesinger, Erica Cohen, Kristen Chiger
and Raleigh Webber for their research assistance. He also wishes to thank his wife,
Rachel Leeds Edelman, for her assistance in developing the concept for a course in
Fantasy Sports & the Law, and the students in his 2011 seminar on Fantasy Sports &
the Law for providing their insights on fantasy sports gaming.
Professor Edelman retains full copyright to this article and has agreed to provide the
Harvard Journal of Sports and Entertainment Law with an irrevocable license to publish
this work.
Copyright  2011 by the President and Fellows of Harvard College.
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Harvard Journal of Sports & Entertainment Law / Vol. 3
IV.
V.
VI.
VII.
A. Different Types of Fantasy Games . . . . . . . . . . . . . . . . . . . . .
1. Different Fantasy Sports . . . . . . . . . . . . . . . . . . . . . . .
2. Different Ways to Initially Allocate Players . . . . .
3. Different Season Lengths . . . . . . . . . . . . . . . . . . . . . .
B. The Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Host Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Commissioners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Treasurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Strategic Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. Insurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LEGAL RISKS FOR FANTASY SPORTS HOST SITES . . . . . . . . . . . .
A. State Gambling Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Is Fantasy Sports Illegal Gambling under State
Law? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Is Fantasy Sports Illegal Gambling? (Majority
View) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Stricter Views Toward Fantasy Sports . . . . . . . . . . .
4. Montana’s Alternative Test of Fantasy Sports . . . .
B. Federal Gambling Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Interstate Wire Act of 1961 . . . . . . . . . . . . . . . . . . .
2. Illegal Gambling Business Act . . . . . . . . . . . . . . . . .
3. Professional and Amateur Sports Protection Act .
4. Uniform Internet Gambling Act . . . . . . . . . . . . . . .
C. Intellectual Property Laws . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Patent Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Copyright Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Trademark Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Right to Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LEGAL RISKS FOR FANTASY SPORTS PARTICIPANTS . . . . . . . . . .
A. Criminal Liability under Gambling Laws . . . . . . . . . . . . . .
B. Civil Liability for Gambling Activities . . . . . . . . . . . . . . . .
C. Violating Company Anti-Solicitation Policies . . . . . . . . . . . .
D. Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LEGAL RISKS FOR ANCILLARY FANTASY SPORTS
BUSINESSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Fantasy Sports Treasury Sites . . . . . . . . . . . . . . . . . . . . . . . . .
B. Fantasy Sports Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Fantasy Sports Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Fantasy Sports Dispute Resolution . . . . . . . . . . . . . . . . . . . . .
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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3
I. INTRODUCTION
America is in the midst of a “fantasy sports revolution” that is changing the way sports fans interact with one another.2 With more than 30
million Americans playing fantasy sports,3 today’s sports fans spend as much
time predicting the performance of professional athletes as Wall Street investors spend predicting stocks and bonds.4
Some fantasy sports contests, such as the World Championship of Fantasy Football, charge participants entry fees in the thousands of dollars, and
offer grand prizes upwards of $300,000.5 Meanwhile, other business ventures, such as Bloomberg Sports, sell fantasy participants “analytical tools”
and “expert advice.”6 One insurance carrier, Fantasy Sports Insurance, has
even begun to offer fantasy participants insurance policies against injury to
their star fantasy players.7
Nevertheless, with the rapid and unexpected emergence of fantasy
sports, few have devoted time to understanding how U.S. law applies to
fantasy sports businesses and their participants. Thus, many have misconceptions about the law of fantasy sports.
This article explains how U.S. law regulates the emerging fantasy
sports industry. Part I of this article provides an overview of the history of
2
Neil Janowitz, Bet on Football, Democrat & Chron. (Rochester, NY), Sept.
16, 2005, at I28, available at 2005 WLNR 26900861; see also infra, notes 159 - 169
and accompanying text.
3
See Gene Wang, Fantasy Football Gets Benched, Wash. Post, May 29, 2011, at
D3 (estimating about 30 million participants in fantasy football); Tom Van Riper,
A Guy’s Fantasy, Forbes, Feb. 28, 2011, at 23 (estimated the entire fantasy sports
marketplace at 30 million participants).
4
See generally Fantasy Football Website Aims to Choose the Best Athletes Using a
Formula Derived from Wall Street. Its Creators are Most Definitely Bullish on Fantasy
Sports, Fla. Sun-Sentinel, Aug. 26, 2009, at 1D (drawing comparisons between
the selection of fantasy sports teams and investment portfolios).
5
See Chris Dempsey, Fantasy Revolution Online Craze is Intoxicating to Americans,
and Expanding Outside the Sports World, Denv. Post, Sept. 9, 2007, at B3 (describing
the entry fees and prizes involved in the World Series of Fantasy Football); Erick S.
Lee, Play Ball!: Substituting Current Federal Non-Regulation of Fantasy Sports Leagues
with Limited Supervision of Hyper-Competitive Leagues, Loy. L.A. Ent. L. Rev. 53, 64
(2008) (describing “the rise of hyper-competitive fantasy leagues offering cash
prizes as high as $100,000”); Childs Walker, Dream Teams: Tired of Second Guessing
How Your Favorite Sports Clubs Are Managed? Fantasy Leagues Let You Take Charge of
the Action, The Balt. Sun, March 6, 2006, at 1D (“You can find high-stakes national games with top prizes in the hundreds of thousands of dollars.”).
6
See infra, notes 161 -164 and accompanying text.
7
See infra notes 165 - 169 and accompanying text.
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fantasy sports leagues. Part II explores the fantasy sports industry today.
Part III explains how U.S. laws apply to fantasy sports host sites. Part IV
discusses how U.S. laws apply to fantasy sports participants. Finally, Part V
applies U.S. laws to businesses that provide ancillary services to fantasy
sports host sites and participants.
II. THE HISTORY
OF
FANTASY SPORTS LEAGUES
A. Before Fantasy Sports
For the American sports fan, professional sports once meant simply an
opportunity to attend games, root for teams, and second-guess “the men
who ran [the] teams.”8 Then, in the 1920s, the company Ethan Allen released a “table game” called All-Star Baseball, which allowed baseball fans
to simulate team management by choosing a “team” from a collection of
player cards and selecting the team’s lineup.9 Each player’s performance in
All-Star Baseball was determined by probabilities that were derived from
the players’ actual past performances, in conjunction with the random event
of rotating a spinner over these cards.10
For almost forty years, All-Star Baseball was seen as the best way for
sports fans to simulate team management.11 Then, in 1961, Hal Richman, a
Bucknell University mathematics student, devised a more complex simulation game.12 Richman’s game, Strat-O-Matic Baseball, included one play8
Walker, supra note 5.
David G. Roberts Jr., Note, The Right of Publicity and Fantasy Sports: Why the
C.B.C. Distribution Court Got It Wrong, 58 Case L. Rev. 223, 231 (2007); see also
Triple Play: Personal Reviews, Op-Ed Pieces, and Polemics from Outside the Purview of the
Umpires, Nine, Sept. 22, 2006, at 110, available at 2006 WLNR 24732952.
10
See Triple Play, supra note 9.
11
Id.
12
See Van Riper, supra note 3 at 24; Stuart Miller, Strat-O-Matic Devotees Celebrate
Its 50th Anniversary, N.Y. Times, Feb. 14, 2011, at D5 (“In his 20s, after discouragement from his father and rejection from numerous companies, Richman borrowed money from friends and started [Strat-O-Matic] on his own.”); Cody
Derespina, Strat-O Turning the Big 5-Oh!, Newsday, Feb. 13, 2011, at A73 (further
noting that “Richman began to develop the game as an 11-year-old in 1948 after
becoming dissatisfied with the statistical randomness present in other baseball
games of the era. He found that using dice added an element of predictability that
jibed with the results of actual ballgames.”); Calling All SABR Geeks, N.Y. Daily
News, Feb. 6, 2011, at 73; Mike James, Extra Bases: Strat Stretches Board Game
History to 50 Years, USA Today, Jan. 11, 2011, at 8C; Rich Freeman, Strat-O-Matic
Still Going Strong, Trenton Times, Jul. 7, 2010, at B2.
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ing card for each Major League Baseball player.13 Each card contained
various ratings and result tables that corresponded to dice rolls.14 For each
game, Strat-O-Matic participants would select teams and batting orders, roll
the dice, and then review charts to determine game results.15
By the 1980s, many other companies had joined Ethan Allen and StratO-Matic in the simulation sports market, with some companies, such as
Micro League Baseball and Avalon Hill, providing their games digitally via
the computer.16 One of the benefits of playing sports simulation games on
the computer was the increased range of managerial options.17 However,
much like the earlier “table games,” the computer sports simulations still
had one significant limitation: they did not allow participants to showcase
managerial prowess by predicting future events.18
B. A New Game is Created
With both traditional “table games” and “computer simulation
games” failing to provide sports fans with a way to predict players’ future
performances, some highly educated sports fans began to experiment with
ways of creating sports simulation games that incorporated future events.19
One of the first people to construct a forward-looking baseball simulation
game was Bill Gamson, a psychology professor at Harvard University and
the University of Michigan.20 Gamson’s game, which he called “The Baseball Seminar,” included a series of participants who paid a ten-dollar entry
13
See Miller, supra note 12.
Id.; see also Freeman, supra note 12; Rob Biertempfe, MLB Q&A: Talking with
Hal Richman, Pitt. Trib. Rev., May 30, 2010, available at 2010 WLNR 11122984.
15
See Miller, supra note 12; Biertempfe, supra note 14.
16
See generally Miller, supra note 12 (noting how computer-based simulation
games began to replace card-based games).
17
See Micro League Baseball Instructions, http://www.stadium64.com/manuals/
microleaguebaseball.htm (noting that Micro League Baseball participants were able
to make players steal bases and bunt).
18
See generally Amorak Huey, What if Sports Provides Surfers with Dream Matchups,
Grand Rapids Press, Mar. 8, 2005, at D2 (comparing fantasy sports with simulation
sports games).
19
Id.
20
See Geoffrey T. Hancock, Upstaging U.S. Gaming Law: The Potential Fantasy
Sports Quagmire and the Reality of U.S. Gambling Law, 31 T. Jefferson L. Rev. 317,
323 (2008); Sam Allis, Lord of the Games: Fantasy Baseball Indebted to Two Innovators,
Boston Globe, Mar. 6, 2006, at A3; Bill Shea, Yes, They are Playing Fantasy Sports at
Work, but is that Bad? Some Executives Bet Not, Crain’s Detroit Bus. J., Mar. 17,
2008, at 11, available at 2008 WLNR 5404899.
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fee to “draft” a team of baseball players.21 The winner of Gamson’s game
was the participant who, over the course of an actual Major League Baseball
season, selected players who earned the most points in a pre-determined set
of statistical categories.22
One of Gamson’s “Baseball Seminar” participants was Robert Sklar, a
retired reporter for the Los Angeles Times who, at the time, taught journalism
and film studies at the University of Michigan.23 In 1965, Sklar mentioned
“The Baseball Seminar” to one of his mentees, Daniel Okrent.24 Almost
fifteen years later, while working as a journalist for Texas Monthly, Okrent
decided to revive “The Baseball Seminar” as a fun competition among some
of his journalist and advertising friends.25
Okrent first proposed the game to his friends in November 1979, over
lunch at a now-defunct New York French bistro, La Rotisserie Francaise.26
After his friends expressed enthusiasm, Okrent contacted Sklar, who, by this
time, was teaching film studies at New York University’s Tisch School of
21
See Hancock, supra note 20; Allis, supra note 20 (noting that Bill Gamson
called his game a “Seminar” to reduce any association between it and illegal
gambling).
22
See Hancock, supra note 20; Allis, supra note 20; Shea, supra note 20.
23
See Hancock, supra note 20 at 324. See generally William Grimes, Robert Sklar,
74, Historian Who Put Films in Context (Obituary), N.Y. Times, Jul. 12, 2011, at
A20 (noting that Sklar was best known as a scholar for his 1975 book “Move-Made
America,” which “was one of the first histories to place Hollywood films in a social
and political context, finding them a key to understanding how modern American
values and beliefs have been shaped.”).
24
See Van Riper, supra note 3 at 24; Hancock, supra note 20 at 324; Fantasy
Baseball’s Reality Defies Belief, Detroit News, Apr. 17, 2005, at C1, available at
2005 WLNR 2698158.
25
See Walker, supra note 5; see also; Fantasy Sports Born on 1979 Flight to Texas,
Myrt. Beach Sun News (Myrtle Beach, SC), Dec. 18, 2005, at B8, available at 2005
WLNR 20423098; Dave Cunningham, Still Cookin’: Rotisserie Baseball Celebrates its
20th Year, Orl. Sentinel, Mar. 26, 2000, at C10; Brad Townsend, It Began as a
Pastime Among New York Literati, But Rotisserie Baseball Soon Wound up Firing up a
Fantasy World, Dall. Morning News, Sept. 19, 2003, at 1C; Patrick Hruby, The
Case Against Fantasy Sports, Wash. Times, Apr. 29, 2003, at C1 (describing Daniel
Okrent’s creation of Rotisserie Baseball on a plane flight from New York, NY to
Austin, TX).
26
See Fantasy Sports Born on 1979 Flight to Texas, supra note 25; see also Mike Hale,
The Few Who Founded Fantasy Baseball, N.Y. Times, Apr. 20, 2010, at C4 (describing the role of an inaugural owners meeting at La Rotisserie Francaise); Fred Ferretti, For Major-League Addicts, A Way to Win a Pennant, N.Y Times, July 8, 1980,
at 8.
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the Arts.27 With Sklar’s help, Okrent updated the game’s rules and announced the founding of the original Rotisserie League.28
C. The First Rotisserie League Baseball Auction
In April 1980, Okrent and his friends returned to the La Rotisserie
Francaise restaurant, along with Sklar, to conduct the first-ever Rotisserie
League baseball player auction.29 For purposes of this auction, each of the
league’s ten participants posted a $260 entry fee.30 Each participant then
used his $260 entry fee to bid on players from Major League Baseball’s National League rosters.31
According to the original Rotisserie League rules, each participant
earned points based on his selected players’ real-life performances in eight
statistical categories: four based on hitting, and four on pitching.32 At the
end of the Major League Baseball season, the Rotisserie League participant
27
See Fantasy Baseball’s Reality Defies Belief, supra note 24 (providing a profile of
the original Rotisserie League team owners); Grimes, supra note 23 (noting Robert
Sklar’s appointment by New York University).
28
See Josh Robbins, Geek Games: It’s Been 25 Years Since 11 Fans Held the First
Rotisserie Auction, Orl. Sentinel, Jun. 8, 2005, at D1 (discussing Daniel Okrent’s
role in creating, and then reshaping, the Rotisserie League rules); see also Allis, supra
note 20 at A6 (describing Sklar as the link between Gamson’s Baseball Seminar and
Okrent’s Rotisserie Baseball).
29
See generally Dan Raley, Living in a Fantasy World: Rotisserie Leagues have Turned
Fans into Fanatics, Seattle Post-Intelligencer, Apr. 6, 1996, at D1 (noting that
“Fantasy or Rotisserie League baseball [began with] exactly 11 people in 1980”); see
also Townsend, supra note 25; Ethan Skolnick, It’s All Geek to Them, Palm Beach
Post, May 16, 1999, at 11B; Ferretti, supra note 26 at 8 (noting that the full group
of inaugural owners in the Rotisserie League included: “Cork Smith, an editor at
Viking and owner of the Smith Coronas; Bruce McCall, an advertising writer, the
McCall Collects; Bob Sklar, a film and television critic, the Sklargazers; Tom
Guinzberg, former Viking editor, the Burghers; Michael Pollet, a lawyer, the Pollet
Burros; Miss Salembier, associate publisher of Ms. magazine; Mr. Fleder, an editor
at Esquire; Mr. Waggoner, an assistant vice president of Columbia University; Mr.
Eisenberg, a writer at Esquire, and Dan Okrent, a freelance writer, owner of the O
Fenokees, and league commissioner.”).
30
See Skolnick, supra note 29; Fred Mitchell, Rotisserie Baseball Isn’t Just a Passing
Fantasy, Chi. Trib., Apr. 11, 1989, at 1.
31
See Skolnick, supra note 29.
32
Id. (noting the original four hitting categories included runs scored, runs batted in home runs and steals; the original four pitching categories included earned
run average, wins, saves and strikeouts); see also Cunningham, supra note 25; Ferretti, supra note 26.
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whose team earned the most points would receive a cash prize, as well as a
dousing in the chocolate drink Yoo-Hoo.33
D. Rotisserie Baseball Grows in Popularity
The original Rotisserie League began “almost as a tongue-in-cheek exercise,”34 and as an attempt by hard-working New Yorkers to have “some
goofy, albeit at times absurdly competitive, fun.”35 However, because many
members of the Rotisserie League were also members of the media, the Rotisserie League garnered national attention.36
Several members of the press published stories about the Rotisserie
League during its inaugural 1980 season.37 For example, just four months
after the league’s inaugural auction, New York Times reporter Fred Ferretti
published an article that detailed the league’s participants and performance.38 Then, a few weeks later, the CBS Morning News produced a story on
the league.39 Shortly thereafter, members of the Rotisserie League even
agreed to publish a book to “introduce the game to the masses.”40
As baseball fans came to learn about the Rotisserie League, their game
began to develop a cult following among statistically-oriented sports fans.41
Like any new game, different groups added their own nuances to the rules.42
33
See Cunningham, supra note 25; Skolnick, supra note 29.
Walker, supra note 5.
35
Townsend, supra note 25.
36
See Tim Feran, Back in the Game: Major League Baseball Trying to Reattract Fantasy Players with New Online Forum, Columbus Dispatch, Apr. 3, 2006, at 2006
WLNR 5582002; see also Hale, supra note 26 (“Most of those team owners were
writers, editors or publishers, which guaranteed publicity.”).
37
38
See Ferretti, supra note 26 at 8; Townsend, supra note 25 at 1C.
39
Townsend, supra note 25 at 1C.
40
Walker, supra note 5, at 1D.
41
See Cunningham, supra note 25 at C10; see also A Whole Different Ball Game,
Atlantic, June 1, 1985, at 30, available at 1985 WLRN 1370459 (noting that by
1985, the Rotisserie League Baseball Association included 157 leagues, across 48
states); Craig Davis, The Paper Tigers: Americans’ Teams Just Read the Box Scores: It’s
Not Whether they Win or Lose but How they Played Last Game, Fla. Sun-Sentinel,
Mar. 22, 1988, at 1C (noting that by 1988 there were really 1,000 fantasy baseball
leagues in America and 15,000 to 20,000 team owners).
42
See Paul White, Fantasy Leagues Variations Keep Game Fresh, USA Today, Aug.
24, 1990, at C6 (discussing various innovations to the Rotisserie League baseball
rules that emerged in the 1980s); cf. Marc Edelman, Why The Single Entity Defense
can Never Apply to NFL Clubs: A Primer on Property Rights Theory in Professional Sports,
34
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9
Some early participants added a fifth statistical category for both batters and
pitchers.43 Others replaced the player auction with a draft to select players.44 Still others replaced the points-based scoring system with a head-tohead system in which fantasy team-owners played against different fantasy
teams each week.45 However, even as individual leagues added their own
nuances, most leagues adopted the original Rotisserie League’s core rules.46
These core rules were thereafter adopted into fantasy games revolving
around other sports.47
E. The Internet Boom
By the early 1990s, America was already in the midst of a growing
fantasy sports revolution, featuring “[fantasy] magazines, season guides, radio shows, statistical services, management groups, sportswear and newsletters.”48 Yet to many, fantasy sports were seen as “activit[ies] for outcasts
[and] engaged [in] by those presumed to be overly bookish and socially
challenged.”49 One of the drawbacks to playing fantasy sports was the
18 Fordham Intell. Prop. Media & Ent. L.J. 891, 898 (2008) (noting a similar
process of moving toward standardized rules also takes place in real sports, such as
professional baseball).
43
See Cunningham, supra note 25 at C10. See generally Walker, supra note 5 at
1D (mentioning the ten-category league format).
44
See Cunningham, supra note 25 at C10; see also Frank Clancy, For Rotisserie
Baseball Fanatics, A Grand Sham, L.A. Times, Apr. 30, 1986, at 1 (mentioning, as
early as 1986, that some fantasy baseball leagues had moved from an auction to a
draft format); White, supra note 42 at C6 (also discussing the option of a league
draft).
45
See Cunningham, supra note 25 at C10; see also White, supra note 42 at C6
(noting that by 1990 some fantasy baseball leagues had moved to a head-to-head
format); Ed Spaulding, Charpentier’s Fantasy Football Digest Now a Real Winner,
Hous. Chron., Jul. 21, 1991, at 16 (mentioning the head-to-head format of fantasy
sports).
46
See Cunningham, supra note 25 at C10; c.f., Robert Thomas Jr., Sports World
Specials: A Team of One’s Own, N.Y. Times, Aug. 20, 1984, at C2 (discussing the
creation of a book, formalizing the core rules for Rotisserie baseball).
47
Id.
48
Cunningham, supra note 25 at C10.
49
See Bo J. Bernhard & Vincent H. Eade, Gambling in a Fantasy World: An Exploratory Study of Rotisserie Baseball Games, 9 UNLV Gaming Res. & Rev. J. 29,
available at 2005 WLNR 6724835.
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amount of paperwork involved in calculating both individual player statistics and team statistics.50
Then, in 1994, the Internet came along and changed everything.51
The Internet boom brought a “broad demographic shift in fantasy sports
participation”52 because it enabled fantasy sports participants to instantaneously download tabulated statistics.53 Thus, fantasy sports participants no
longer needed pads of paper and calculators.54 In addition, the Internet
brought participants together from around the globe, whereas before fantasy
sports participants had “to scramble to find playmates.”55
With the Internet’s facilitation of fantasy sports, by the mid-1990s a
number of traditional sports and entertainment companies had begun to
enter the online fantasy sports marketplace.56 The first of these companies
to provide fantasy sports games on the web was the Entertainment Sports
Programming Network (“ESPN”), which in 1995 launched its first entirely
Internet-based fantasy baseball game.57 By the year 2000, ESPN had ex-
50
See Dennis Lynch, Software Helps Handle Hassles of Running a Fantasy League,
Chi. Trib., Sept. 17, 1998, at 7 (explaining that even though millions participate in
fantasy sports leagues, “the major drawback of such play has been the paperwork
involved,” and that “[t]he process of compiling statistics and sending out standings
is time-consuming and tedious.”).
51
See infra notes 52 - 58 and accompanying text; see also Nicholas Bamman, Is the
Deck Stacked Against Internet Gambling? A Cost-Benefit Analysis of Proposed Regulation,
19 J.L. & Pol’y 231, 232 (2010) (noting that Internet gambling today is a $24
billion annual industry, with about 25 percent of revenues derived from the United
States); Kevin F. King, Geolocation and Federalism on the Internet: Cutting Internet Gambling’s Gordian Knot, 11 Colum. Sci. & Tech. L. Rev. 41, 71 (2010) (noting that
Americans today spend roughly $7 billion per year on Internet gambling).
52
Bernhard & Eade, supra note 49; see also Risa J. Weaver, Online Fantasy Sports
Litigation and the Need for a Federal Right of Publicity Statute, 210 Duke L. & Tech.
Rev. 2, ¶ 1 (2010) (“This phenomenal growth [in fantasy sports] can be explained
in two words: the internet.”); Nicole Davidson, Comment, Internet Gambling: Should
Fantasy Sports Leagues Be Prohibited, 39 San Diego L. Rev. 201, 202 (2002).
53
See Fantasy Sports: A Booming Business, Miss. Link, Sept. 17, 2003, at B1, available at 2003 WLNR 13365412.
54
Id.
55
Greg Johnson & David G. Savage, Supreme Court Calls Fantasy Baseball Safe,
Refuses to Hear Major League’s Argument to Protect Statistics, L.A. Times, Jun. 3, 2008,
at A1.
56
See infra notes 123 – 136 and accompanying text.
57
See Regis Behe, Fantasy Sports Leagues Put Armchair Quarterbacks in the League,
Pitt. Trib. Rev. (Greensburg, PA), Dec. 14, 2002, available at 2002 WLNR 12019633.
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11
panded its fantasy sports offerings into football, basketball, hockey, NASCAR, soccer, golf, and even fly fishing.58
III. THE FANTASY SPORTS INDUSTRY TODAY
A. Different Types of Fantasy Games
Fantasy sports today represent approximately a $5 billion per year industry.59 Given the size of the fantasy marketplace, fantasy games are now
subcategorized based on three attributes: (1) sport; (2) way of initially allocating players; and (3) season length.60
58
Id.; see also Patrick Hruby, The Case Against Fantasy Sports, Wash. Times, Apr.
29, 2003, at C1; Steve Brearton, Fantasy Sports, Real Money: How the Fantasy Sports
Leagues went from a Cute Office Diversion to a $3 Billion (U.S.) Industry, Providing
Daydreams for up to 30 Million North American Sports Fanatics, Globe & Mail (Toronto, Canada), Apr. 24, 2009, at 56 (noting that in 2009 FLW Outdoors Fantasy
Fishing offered $10 million in prizes during its Fantasy Fishing for Millions competition); Chris Dempsey, Fantasy Revolution Online Craze is Intoxicating to Americans,
and Expanding Outside the Sports World, Denv. Post, Sept. 9, 2007, at B3 (“Fantasy
NASCAR is growing, as is fantasy golf. There is fantasy tennis, fantasy soccer (who
is Chelsea’s top midfielder again?), fantasy lacrosse, fantasy cricket and fantasy bass
fishing.”); c.f. Anthony Vecchione, Fantasy Sports: Has Recent Anti-Gambling Legislation ‘Dropped the Ball’ by Providing a Statutory Carve-Out for the Fantasy Sports Industry,
61 SMU L. Rev. 1689, 1693 (2008) (“A survey of fantasy sports players published
in a 2003 article showed that 65% had football teams, 27% had baseball teams,
24% had basketball teams, 11% had hockey teams, 9% had NASCAR teams, and
3% had golf teams”).
59
See Zach O’Malley Greenburg, Get Real, Forbes, Mar. 16, 2009, at 70 (“Add
all these betting sums to revenues from magazine sales and stat-service subscriptions
and you get $468 per player, reports the Fantasy Sports Trade Association. That
makes for a $5 billion industry, not including undisclosed amounts from ads.”).
Cf., Mike Klis, NFL Preview ‘07 Football Nation: Fantasy Football, Denv. Post, Sept.
6, 2007, at J8 (“Fantasy football grosses more than $1 billion a year, and that
doesn’t include the private pots accumulated from the 4 million players in the free
Yahoo.com league.”); Tim Feran, Back in the Game: Major League Baseball Trying to
Reattract (sic) Fantasy Players with New Online Forum, Columbus Dispatch, Apr. 3,
2006, available at 2006 WLNR 5582002 (A 2006 “survey produced for the [Fantasy Sports Trade Association] indicates that more than $3 billion is spent annually
on publications, league fees, commissioner services, transaction fees and the
purchase of fantasy-sports-site content.”).
60
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1. Different Fantasy Sports
Today’s fantasy participants play games in a wide range of different
sports.61 Fantasy football is currently the most popular, with an estimated
20 million participants per year.62 Indeed, at present “[t]he [fantasy] football season generates more revenue than the rest of the sports combined.”63
Fantasy baseball is second in terms of popularity, with approximately
11 million annual participants.64 While most sports fans consider fantasy
baseball to be the original fantasy sport, one of the challenges in building its
popularity is the extended length of the Major League Baseball season, and
the need for fantasy baseball owners to monitor their teams on a more frequent basis than owners in other fantasy games.65
Immediately behind fantasy baseball in popularity lie fantasy racing,
basketball, and hockey.66 According to the Fantasy Sports Ad Network, as
of August 2006 there were 4.6 million participants in fantasy racing games
(including fantasy NASCAR), 3.2 million participants in fantasy basketball
games, and 1.9 million participants in fantasy hockey.67
61
See Mike Vaccaro, NFL Strife is Leaving Fans Awash in Denial, N.Y. Post, May
13, 2011, at 72 (noting that in 2010 nearly 20 million people played fantasy football); see also Larry Copeland, Americans Give Thumbs Up to Free Time – Mostly TV,
USA Today, Dec. 23, 2010, at 4A (noting that between 20 million and 30 million
Americans play fantasy football); Gene Wang, High-Stakes League Offers Camaraderie
- and Agony of Defeat, Virginian Pilot & Ledger Star (Norfolk, VA), Nov. 25,
2010, at 7.
63
Gene Wang, Fantasy Football Gets Benched, Wash. Post, May 29, 2011, at D3.
64
See This is Not a Fantasy: Baseball Takes Legal Twist, Players Turn to Lawyers to
Mediate League Disputes, S. Fla. Sun-Sentinel, Apr. 2, 2010, at A1 (noting that
there are more than 11 million fantasy baseball participants in the United States);
Richard Wilner, Opening Day – Bloomberg Brings Numbers Game to Baseball Statistics,
N.Y. Post, Mar. 21, 2010, at 38.
65
See Chuck Corder, Small Talk, Pensacola News, Aug. 23, 2005, at D1,
available at 2005 WLRN 27180356 (discussing “daily transactions” as the downfall
of fantasy baseball).
66
See This is Not a Fantasy, supra note 64 at A1 (referencing “fantasy basketball”
and “fantasy NASCAR”); Childs Walker, No More Chilly Reception for Fantasy Hockey
Leagues, Balt. Sun, Sept. 21, 2006, at E2; see also, infra, note 67 and accompanying
text).
67
See About Fantasy Sports, Fantasy Sports Ad Network, at http://
www.fantasysportsadnetwork.com/aboutfantasy.htm (last visited Oct 17, 2011).
62
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13
Finally, one other fantasy game worth noting is fantasy golf.68 Fantasy
golf is a niche game with a limited number of participants.69 However,
because the demographics of golf fans skew toward the higher income brackets, fantasy golf games often include high entry fees and high prize pools.70
To meet the needs of golf fans, companies such as Fantasy Pro Tour Golf
have recently begun to offer fantasy golf contests with prizes up to $3,000
per season.71
2. Different Ways to Initially Allocate Players
For each type of fantasy sport, there are four potential ways to initially
allocate players.72 The original way to allocate players in fantasy sports was
through an auction.73 Traditional auctions, the type used by the Rotisserie
League, involve a bidding process among participants for players, one player
at a time.74 Each player is ultimately assigned to the participant that bids
the greatest amount from a fixed sum of money for that player.75 This continues until every team has “purchased” a full roster of players.76
A second way to allocate players is through a “modified auction.”77 In
a modified auction, the price of each player is determined before the competition begins, and multiple participants in a single league may select the
same player.78 The modified auction is especially popular in short-duration
leagues because it does not require all of the league’s participants to simulta68
See Bill Pennington, A Fantasy Fulfilled, Including Yelling at the TV, N.Y.
Times, Jun. 9, 2009, at D6.
69
Id.
70
See Josh Bousquet, Minor Moves May Help Signal Bargain Values, Worchester
Telegram & Gazette, Jan. 14, 2009, at C4.
71
Id.
72
See Walker, supra note 5 at 1D.
73
See supra note 29 and accompanying text (describing original Rotisserie
League auction).
74
See Walker, supra note 5, at 1D.
75
See Bernhard & Eade, supra note 49.
76
77
See infra notes 78 - 79 and accompanying text (describing modified auction
leagues).
78
For fantasy sports games that allocate players in this manner, see, e.g., Rules,
DraftStreet, http://www.draftstreet.com/rules.aspx (follow “Draft Styles” hyperlink; then follow “Salary Cap Leagues” hyperlink) (last visited Nov 7, 2011)
(describing these leagues as “salary cap” leagues); Salary Cap Football, Yahoo!
Sports, http://football.fantasysports.yahoo.com/salcap (last visited Nov. 7, 2011).
14
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neously select players.79 However, the downside to a modified auction is
that it removes the element of “trading” from fantasy sports because trading
players would not make sense if a particular player is already on more than
one team’s roster.
A third way that some fantasy sports leagues allocate players is through
a league draft.80 Draft leagues take their inspiration from the way in which
new players are allocated in the majority of real, professional sports
leagues.81 Most fantasy sports leagues that begin their season with a draft
adopt a “snake format draft,” meaning that participants select players in
rotation, often with the same owner who selected first in round one, selecting last in round two, and vice-versa.82 The initial draft order is often determined by a random event.83 However, in some of the more comprehensive
fantasy sports competitions, owners have the opportunity to express their
preference for a particular draft position before the draft begins.84
Finally, in some rare cases, fantasy participants agree to have players
allocated to their teams randomly by software provided by the league’s host
site.85 For example, a growing number of host sites (such as ESPN.com),
provide an “Autopick Draft Option,” in which a computer program, rather
79
See, e.g., Rules, supra note 78.
For an example of a league that initially allocates players via draft, see, e.g.,
Fantasy Football 2011, CBS Sports.com, http://football.cbssports.com/splash/football/spln/single/rules#rules_single_leagues (last visited Nov 7, 2011) (Oct. 18,
2011) (discussing the “live draft” and “automated draft” options).
81
See Marc Edelman & Brian Doyle, Antitrust and “Free Movement” Risks of Expanding U.S. Professional Sports Leagues into Europe, 29 N.W. J. Int’l L. & Bus. 403,
406–7 (2009) (“The first-year player draft in [American professional sports leagues]
is a procedure under which clubs allocate negotiating rights to prospective players
in inverse order of the clubs’ previous season on-the-field performance. . . .[T]he
team with the poorest playing-field record during the previous season has the first
choice of a player seeking to enter the league for the following season. The team
with the next poorest record has the second choice, and so on until the team with
the best record has picked. . . . These rounds continue until an appropriate number
of players is selected.”).
82
83
See, e.g., Fantasy Football 2011, supra note 80 (stating that “[t]he order of the
draft will be randomly generated between midnight and 6:00 AM ET either the day
of, or the day before the draft.”).
84
See, e.g., Official Rules and Regulations of the NFBC, Nat. Fantasy Baseball
Championship, http://nfbc.stats.com/baseball/375_slow_rules.asp (noting the
league’s draft format allows participants to express a preference for a particular slot
in the draft order) (last visited Nov 7, 2011).
85
See infra note 86 and accompanying text.
80
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15
than a participant, “automatically drafts players to each team in the league
on a scheduled draft date.”86 Despite the efficiency of the “Autopick Draft
Option,” this option remains relatively unpopular because it removes all
skill from the drafting of players.
3. Different Season Lengths
Fantasy sports leagues also differ based on the lengths of their fantasy
seasons.87 Seasonal leagues (also known as “redraft leagues”) are the most
common fantasy-season length.88 In a seasonal league, the fantasy competition begins on the first day of a professional sport’s regular season, and concludes on the last day.89 Thus, none of the fantasy team’s rosters or
information carries over from one year to the next.90 Rather, at the end of
the season, the league ceases to exist.91 If the league’s participants thereafter
wish to compete against each other for another season, the participants will
need to conduct an entirely new player auction or draft before the following
season begins.92
Somewhat less common than seasonal leagues are perennial leagues
(also known as “keeper leagues”) that extend beyond a single professional
sports season.93 The two main types of perennial leagues are dynasty leagues
and rollover leagues.94 In a dynasty league, each fantasy participant’s entire
roster is carried over through the off-season, so fantasy participants are able
to make player trades with one another during the off-season time period.95
Meanwhile, in a rollover league, “each team can ‘keep’ a set number of
86
ESPN Fantasy Football 2011: Rules, ESPN.com, http://games.espn.go.com/ffl/
resources/help/content?name=drafts-autopick (last visited Nov. 7, 2011).
87
See Definitions of the Various Fantasy Sports Leagues, Sports Fanatics Fantasy
Baseball, (Dec. 26, 2002), http://www.sportfanatics.net/Articles/General/
Types_Of_Fantasy_Sport_Leagues.htm.
88
See id.
89
See id.
90
See id.
91
See id.
92
See id.
93
See id.; see also Liz Farmer, Web Sites Offering Arbitration for Fantasy Sports Disputes, Daily Rec. (Baltimore, MD), Sept. 10, 2007 (describing leagues where teams
keep players beyond a given season as “keeper leagues”).
94
See Definitions of the Various Fantasy Sports Leagues, supra note 87.
95
See id., supra note 87. See also David Kendricks, Pure Fantasy, San Antonio
Express-News, Jan. 6, 2007, at 2C (describing a “dynasty league” as one where a
fantasy participant can keep a player on his team for as many years as he wants); see
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players at the end of each season to be on their roster for next year,” with
each participant filling in the remainder of his roster through a supplemental auction or draft.96
Finally, some fantasy sports seasons last for less than one full professional sports season.97 Of these partial season leagues, the most popular are
daily leagues, which involve participants joining, paying entry fees, selecting players, and receiving prize money, all in a single day.98 According to
Brian Schwartz, the founder of the daily fantasy league website DraftStreet.com, daily fantasy sports leagues “appeal to aggressive fantasy sports
players looking for more instant gratification than traditional fantasy
leagues can offer.”99 However, as Wall Street Journal fantasy sports reporter
Nando DiFino has noted, daily games have struggled to “shake off the
stigma of gambling.”100
B. The Stakeholders
Within each of these types of fantasy sports games, there are six different stakeholder groups involved in the action.101
1. Participants
Participants are the individuals who compete in the fantasy sports
leagues.102 In 2010, there were more than twenty-five million fantasy sports
also Cathy Fazio, The Tribe Has Spoken, Liven up Your League, Grand Rapids Press,
Jan. 20, 2005, at D2.
96
See Definitions of the Various Fantasy Sports Leagues, supra note 87.
97
See Left Tackle LLC Subsidiary Announces Business Gains, Expansion, Daily Pak
Banker (Pakistan) Jan. 24, 2011, available at 2011 WLNR 1483977 [hereinafter
Left Tackle] (referring to these games as the “short-term fantasy sports model” or
“short-duration leagues”); Nando DiFino, Everyday Fantasies, Wall Street Journal Online, Mar. 5, 2010, http://online.wsj.com/article/SB1000142405274870
3915204575103652233621286.html.
98
See, e.g., Fantasy Sports Live, https://www.fantasysportslive.com/contests.html (last visited Nov. 7, 2011); Draft Street, supra note 78. See generally
Oskar Garcia, Daily Fantasy Sports Become a Gambling Reality, Contra Costa Times
(Walnut Creek, CA), Sept. 26, 2010, at 9A (discussing growing interest among
fantasy sports participants in daily fantasy sports games).
99
See Left Tackle, supra note 97.
100
DiFino, supra note 97.
101
102
See Shea, supra note 20, at 11.
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17
participants.103 The typical fantasy sports participant is a male, in his middle to late 30s, with a bachelor’s degree, and a household income of between
$75,000 and $80,000.104 He lives in the suburbs, spends between $450 and
$500 per year playing fantasy sports, and competes mainly against friends he
knows from real life.105
There are also a number of important sub-segments of fantasy sports
participants.106 One of these sub-segments includes the “high-stakes participants,” who play in several fantasy sports leagues per season, play in
leagues with entry fees that exceed $1,000 per season, and dedicate 10 or
more hours per week to their fantasy team rosters.107 High-stakes fantasy
participants come from a wide range of different backgrounds. One example
of a high-stakes fantasy participant is a small business owner from Oshkosh,
WI, who, in a recent interview with his local newspaper, explained that he
spends 15 to 20 hours per week attending to his fantasy sports teams and up
to 30 hours per week researching players for his fantasy football drafts.108
103
See Fantasy Sports Trade Association, http://www.fsta.org (last visited
Nov. 7, 2011); see also Tom Mulhern, Fantasy Becomes Reality: Three Businesses Based in
Madison are Riding a Recession-Proof Wave of Web-Based Fantasy Sports, Wis. St. J.,
June 27, 2010, at F1, available at 2010 WLNR 13369828 (noting that according to
a 2008 report from the Fantasy Sports Trade Association, “[i]t is estimated 25.1
million Americans age 12 and older played fantasy sports in 2008”); Brad R.
Humphries & Dennis Tamsay Howard, The Business of Sports: Perspectives
on the Sports Industry 269 (2008) (estimating the number of people who have tried
fantasy sports to be as high as 35 million).
104
See Mulhern, supra note 103; see also Jeremy Fowler & Chris Silva, Living in a
Fantasy World: ‘General Managers’ Take Their Sports Leagues Seriously, Fla. Today
(Melbourne, FL), Jun. 29, 2003, at 1, available at 2003 WLNR 18145423; Lee,
supra note 5, at 69-70 (describing the typical fantasy sports contestant as being
educated and having disposable income); cf. Patti Waldmeir, Protect the Facts for
Fantasy, Fin.Times, Oct. 23, 2007, available at http://us.ft.com/ftgateway/
superpage.ft?news_id=fto102320071306479921&page=2 (“[A]ny American
whose social group includes 20- or 30-something men with a broadband connection
can attest to the popularity of sports fantasies online: at every cocktail party or
backyard barbecue, talk soon turns to the fantasy leagues.”).
105
See Mulhern, supra note 103; see also Fowler & Silva, supra note 104.
106
107
See generally Josh Bousquet, Hopefuls Span Age and Gender, Worcester Telegram & Gazette, Aug. 22, 2008, at C4 (“Another group that is being caught up in the
fantasy world is composed of high rollers. If any of you upper-crust members happen to come across these words, I direct you to the Fantasy Football Open
Championship.”).
108
Fantasy Footballers Cash In, Post-Crescent (Appleton, WI), Jan. 16, 2009,
at A1 (referencing fantasy sports participant Dave Gerczak).
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Another example is an associate professor of computing and software systems
at the University of Washington.109 In an interview with the New York
Times, he explained that he “spends about 10 hours a week handling the
budgets of fantasy teams in high-stakes events,” and pays a $1,300 entry fee
each year to compete in the National Fantasy Baseball Championship.110
A second sub-segment of fantasy sports participants are female participants.111 According to a recent survey by the Fantasy Sports Trade Association, female participants are the fastest growing sub-segment of fantasy
sports participants.112 While once representing just two percent of all fantasy sports participants, females now compose between 15 and 20 percent of
the overall fantasy marketplace.113 When compared to fantasy sports participants overall, female participants are often described as being more interested in the social component of fantasy leagues.114 In addition, many
female participants prefer to obtain their fantasy sports advice from websites
geared toward women, such as Jordan Zucker’s Girls Guide to Fantasy
Football.115
109
See Vincent M. Mallozzi, In Fantasy Sports, It Helps Being a Rocket Scientist,
N.Y. Times, Apr. 15, 2007, available at 2007 WLNR 7152547 (referencing fantasy
sports participant Clark Olson).
110
Id.
111
See Jon Boswell, Note, Fantasy Sports: A Game of Skill that is now Implicitly
Legal Under State Law, and now Explicitly Legal Under Federal Law, 25 Cardozo
Arts & Ent. L. J. 1257, 1259 (2008) (noting that “[o]ut of the 8.5 million people who
play fantasy football, 1 million are women”); see also Jonathan Beer, Media World:
Ranks of Women Fantasy Football Players Growing, Daily Finance, Aug. 13, 2009,
http://www.dailyfinance.com/story/media/media-world-ranks-of-women-fantasyfootball-players-growing/19125945 (noting that Yahoo! estimates about 12 percent
of its fantasy sports contestants are women).
112
See Anna Kim, Women Share the Fantasy on Football Draft Day: Local All-Female
Group Reflects Trend of a New Audience Tracking the NFL in Leagues of their Own, Buffalo News, Sept. 9, 2009, at D1; Games People Play, Grand Rapids Press, Sept. 4,
2008, at D8.
113
Calling All Fantasy Sports Widows - When His Fantasy is His Sports Team and
Not You, Bus. Wire, Aug. 27, 2009, http://www.businesswire.com/news/home/
20090827005154/en/Calling-Fantasy-Sports-Widows---Fantasy-Sports (estimating
the percentage of women fantasy participants at 15 percent); Kim, supra note 112 at
D1; Games People Play, supra note 112, at D8 (noting that women currently make up
15 percent of all participants, compared to 3 percent in 2000).
114
Cf. Kim, supra note 112, at D1 (noting the number of all-woman leagues has
increased steadily, as well as the number of women participating in workplace
leagues).
115
See Beer, supra note 111 (noting that Jordan Zucker is an actress and female
fantasy sports participant, who previously appeared on the television sitcom
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19
A final sub-segment of the fantasy sports participants are those who
compete in “family friendly” or educational leagues.116 Participants in family friendly leagues seek to participate within “an online environment where
grownups and kids can enjoy fun and interactive features that are educational.”117 In stark contrast to the high-stakes participants, family gamers
are generally unconcerned with league entry fees and prize money.118
Rather, they care primarily about the interactive experiences their games
provide.119
2. Host Sites
For each type of fantasy league, one of the first league decisions involves choosing a “host site.” “Host sites” are the websites that store
league data and serve as the place where participants make changes to their
rosters.120 These sites provide a platform for real-time statistical updates
and tracking.121 In addition, some host sites collect league entry fees, distribute prize money, manage message boards, and provide expert analysis.122
In terms of market share, there are currently three dominant host sites
in today’s fantasy sports marketplace: ESPN, Yahoo!, and CBS Sports.123
Both the ESPN and Yahoo! sites offer only one type of hosting: a basic, free
service available to all users.124 By contrast, CBS Sports offers three types of
“Scrubs”); see also Girls Guide to Fantasy Football, http://girlsguidetofantasy
football.com (last visited Oct. 17, 2011).
116
117
Family Fantasy Sports Website, http://familyfantasysports.com/about-us
(last visited Oct. 17, 2011).
118
See id.
119
See id.
120
See Humphrey v. Viacom, Inc., No. 06-2768, 2007 WL 1797648, at *1
(D.N.J. June 20, 2007) (noting that host sites obviate the need of early fantasy
sports participants to compile lineups and update player statistics manually).
121
See id.
122
See id.
123
Cf. Wang, supra note 3, at D3 (“Yahoo is the most visited fantasy football
site, according to recent data compiled by Experian Hitwise, a leading Internet
analytics service provider. Yahoo, which offers free team scoring but charges for its
enhanced game tracker function, claimed nearly 46 percent of all fantasy football
visits in September 2010, with ESPN next at 34 percent.”).
124
See ESPN Fantasy Baseball 2011: Rules, ESPN.com, http://
games.espn.go.com/flb/content?page=flbrulesindex2011 (last visited Oct. 17,
2011). Note, however, that both ESPN and Yahoo charge users for the purchase of
premium add-on services. For example, Yahoo sells four premium-add on-services:
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hosting: Free, Commissioner, and Premium.125 The CBS Commissioner service costs participants $179.95 per league ($17.99 per team in a 10-team
league), and gives participants the ability to view live game scoring, as well
as “complete control of . . . rules, scoring, and overall setup.”126 Meanwhile,
the CBS Premium service costs anywhere from $29.99 to $499.99 per team
and includes a cash prize for the league winner that ranges from 50% to
70% of the league’s total entry fees.127 Thus, fantasy sports participants that
select CBS’s Premium hosting service do not need to privately collect entry
fees or pay prize money.128
In addition to these three dominant host sites, most professional sports
leagues offer free hosting services through their own centralized league,129
and a number of niche businesses operate host sites for specialized participant groups.130 For example, high-stakes participants today have a variety
of web-hosted competitions from which to choose.131 One such competition
is the World Championship of Fantasy Football (“WCOFF”), which offers
an annual, approximately 600-participant, fantasy football tournament with
a $1,800 entry fee and a $300,000 grand prize.132 Another competition, the
Fantasy Football Players Championship (“FFPC”), offers a somewhat smaller
a league counting report; a trade review service; a fantasy sports guide; and teammanagement and recommendation software. See Yahoo Fantasy Baseball Premium
Add-Ons,
Yahoo! Sports, http://baseball.fantasysports.yahoo.com/b1/
premiumaddons.
125
See Fantasy Baseball 2011, CBS Sports, http://baseball.cbssports.com/splash/
baseball/spln/single/chart (last visited Oct. 17, 2011).
126
Fantasy Baseball 2011 Commissioner, CBS Sports, http://baseball.cbssports.com/splash/baseball/spln/mgmt (Oct. 17, 2011).
127
See Fantasy Baseball Premium Games 2011, CBS Sports, http://baseball.cbssports.com/splash/baseball/spln/single (last visited Oct. 17, 2011).
128
See Fantasy Baseball Premium Games 2011, supra note 127.
129
See, e.g., Major League Baseball’s Fantasy Baseball, MLB.com, http://
mlb.mlb.com/mlb/fantasy/?tcid=nav_mlb_fantasy (last visited Oct. 17, 2011); National Football League’s Fantasy Football, NFL.com, http://www.nfl.com/fantasy (last
visited Oct. 17, 2011).
130
131
132
See Wang, supra note 62 at 7; see also Fantasy Footballers Cash In, Post-Crescent (Appleton, WI), Jan. 16, 2009, at A1 (noting that the World Championship of
Fantasy Football most recently consisted of 600 total teams); Mark St. Amant, When
Fantasy Players Go All In, N.Y. Times, Aug. 2, 2007, at 16 (“The WCOFF is this
country’s original high-stakes fantasy football league, the Super Bowl of the hobby.
The entrance fee alone is almost $2,000 . . . including a whopping $300,000 champion’s purse.”).
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21
fantasy football tournament, where all league entry fees are placed into an
escrow account.133 Meanwhile, the National Fantasy Baseball Championship
(“NFBC”) offers a high-stakes fantasy baseball contest, which includes over
300 teams, a $1,300 per participant entry fee, and a grand prize of more
than $100,000.134
Finally, for the family-oriented segment of fantasy sports participants,
Family Fantasy Sports provides hosting services for games that are free to
enter.135 While many of the Family Fantasy Sports games have prizes for the
winners, these prizes “are focused on kids and families,” and are intended to
encourage healthy lifestyle behaviors such as fitness and saving money for
college.136
3. Commissioners
In addition to selecting an appropriate hosting service, every fantasy
sports league also needs to select a commissioner.137 “Commissioners” are
those who manage fantasy sports leagues by establishing league rules and
resolving disputes over rule interpretations.138 In many high-stakes commercial leagues (e.g., the WCOFF, FFPC and NFBC), the competition pro-
133
See Fantasy Footballers Cash In, supra note 108, at A1.
See Mike Rainey, Want to Make a Bet . . . On Fantasy Baseball?, St. Louis
Post-Dispatch, Mar. 12, 2007, at C2.
135
See Family Fantasy Sports, http://familyfantasysports.com/fantasy-leagues/
prize-rules/ (last visited Oct. 17, 2011).
136
Id.
137
138
See Walker, supra note 5, at 1D; see also Bernhard & Eade, supra note 49, at 30
(“The commissioner manages the league by establishing league rules and resolving
disputes over rule interpretations. Commissioners may also be responsible for publishing league standings (or selecting the Internet service that will do so), ensuring
that all fees are paid, and organizing drafts, league parties, and/or award ceremonies.”); Hancock, supra note 20, at 325 (“Using online websites to host the league,
the ‘commissioner’ of the league gathers each gamer’s entry fee to create a cash
prize.”).
134
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vides a league commissioner.139 In most private fantasy leagues, one of the
league’s participants is nominated to serve in that role.140
In recent years, there has been movement in both commercial and private fantasy leagues to outsource some of the commissioner’s responsibilities
to a third-party dispute resolution business, such as SportsJudge.com.141
While the decisions of these third-party dispute resolution businesses are
not inherently legally binding, a fantasy league could write into its league
constitution an arbitration clause that would give these rulings a binding
effect.142 For example, the SportsJudge.com Model League Constitution recommends that fantasy sports participants adopt language in their league
rules that states “[a]ny and all disputes amongst league members about any
of the rules and terms related to either this league or the league constitution
shall be resolved, in a final and binding manner, by SportsJudge.com.”143
4. Treasurers
Fantasy sports leagues with entry fees and prize money also must select
a treasurer to collect money at the beginning of the season, and to distribute
it to the winners at the season’s end.144 In high-stakes commercial leagues,
an employee of the host site serves in this role.145 In private leagues, this job
139
See, e.g., National Fantasy Baseball Championship Rules, Nat. Fantasy Baseball Championship, http://nfbc.stats.com/baseball/nfbcdoubleplay_rules.pdf (discussing throughout the role of the NFBC’s internal commissioner) (last visited Oct.
17, 2011); cf. Talalay, supra note 64, at 1A. (“Fort Lauderdale-based CBSSports.com
gets daily inquiries but encourages players to resolve their own disputes unless they
are playing premium games in which the company, rather than a league member,
serves as commissioner.”).
140
See Fantasy Sports: A Booming Business, supra note 53 (“In addition to owners,
each league carries a commissioner, someone responsible for managing the league.”).
141
See SportsJudge, http://www.sportsjudge.com (last visited Oct. 17, 2011)
(discussing SportsJudge’s role in providing outside dispute resolution to fantasy
sports leagues); Waldmeir, supra note 104 (“But, as always, where two or three
people gather together online there will be disputes and, as fantasy sports continue
to grow, there are likely to be more and more of them. Mr. Edelman has set up a
website, www.SportsJudge.com, to arbitrate these virtual disputes online. All this
legal activity is a sure sign that fantasy sports have finally come of age. Even alternative realities need some rules to live by.”).
142
143
See Sample SportsJudge.com League Constitution (document on file).
144
145
See, e.g., National Fantasy Baseball Championship Rules, supra note 139 at 11.
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23
is often performed by one of the participants.146 Like with commissioner
services, however, a growing number of private leagues are outsourcing the
treasury role to third parties.147
The most well-known of these third-party treasury sites is LeagueSafe,
which was launched in March 2008.148 LeagueSafe allows fantasy sports participants to transfer funds directly from their bank accounts to the website.149 Once LeagueSafe receives league funds, it deposits them into an
interest-generating, FDIC-insured bank account with either U.S. Bank or
The Bancorp Bank.150 At the end of the season, LeagueSafe disperses these
funds “in accordance with [each fantasy] league’s rules.”151 In exchange for
its services, LeagueSafe charges users who wish to transfer money (by paper
check or through an “electronic funds transfer”) a $3 fee.152
Another company that provides third-party treasury services to fantasy
sports leagues is Fantasy Sports Vault (“FSV”), which declares on its website
that its mission is “to provide a secure, efficient, flexible, easy to use and
neutral 3rd party proprietary virtual treasurer system to manage your fantasy
league’s money.”153 According to the FSV website, like LeagueSafe, “FSV
secures . . . money into one of two holding accounts, both located at FDIC
insured banks.”154 However, the FSV website does not prominently disclose
which banks hold the participant funds.
146
See How to Eliminate Those Roto Dump Trades, Cincinnati Post, Aug. 11,
1998, at 5D (suggesting that every fantasy league should select one of its participants to serve as its treasurer).
147
148
See Steve Bills, Offering Real Security to Fantasy Leagues, Am. Banker, Oct. 5,
149
See How It Works, LeagueSafe.com, https://www.leaguesafe.com/
HowItWorks (last visited Nov. 9, 2011).
150
Id.; see also Bills, supra note 148.
151
See How It Works, supra note 149.
152
See Payment Provider Offers Prepaid Cards for Fantasy Sports, Cardline, Oct. 3,
153
Why Fantasy Sports Vault, FantasySportsVault.com, http://
www.fantasysportsvault.com/View/whyfsv.aspx (last visited Nov. 9, 2011).
154
FAQs, FantasySportsVault.com, http://www.fantasysportsvault.com/View/
Faqs.aspx (last visited Nov.7, 2011)
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5. Strategic Advisors
Then there are the strategic advisors, who make their living by providing advice to other fantasy sports participants.155 Much like stock analysts
on Wall Street, fantasy sports advisors devote their careers to following the
performances of professional athletes in far greater detail than the average
working professional could do independently.156
The range of services provided by fantasy sports advisors varies significantly.157 Some advisory websites provide generalized information about
premier players. For example, the advisory sites of Sandlot Shrink and Roto
Experts provide information about specific players they believe are likely to
perform well.158 Other sites, such as Rotowire.com, provide news wire updates on a broader range of players, many of whom still compete on a minor
league level.159 Still other websites provide a call-in line, to which fantasy
sports participants may call and pay by the minute to speak with a selfproclaimed fantasy sports “expert.”160
Finally, the newest form of fantasy sports advice occurs through “analytical tools” that assist participants in drafting players and optimizing their
weekly lineups.161 One such provider of fantasy advice via “analytical tools”
is Bloomberg Sports: a division of the financial services company Bloomberg
L.P.162 In 2010, Bloomberg Sports launched its analytical tools business to
help fantasy participants optimally draft their teams at the beginning of the
season, and then analyze trade offers and potential roster moves during the
season.163 Today, the Bloomberg Sports advisory software “syncs with
CBSSports.com, ESPN and Yahoo! to read the settings and teams in those
155
157
158
See Subscription Info, The Sandlot Shrink, http://www.sandlotshrink.com
(last visited Nov.7, 2011); see also RotoExperts, http://www.rotoexperts.com/
sjowbranch.php?id=94 (last visited Nov.7, 2011).
159
See Rotowire, http://www.rotowire.com (last visited Nov. 9, 2011).
160
See Advisor FantasySports Guru, https://www.keen.com/details/AdvisorFantasySports-Guru/Fantasy-Sports/5300988 (last visited Nov. 9, 2011).
161
Front Office 2011, Bloomberg Sports, http://bloombergsports.com/frontoffice/about (last visited Nov. 9, 2011).
162
Frequently Asked Questions, Bloomberg Sports, https://www.bloomberg
sports.com/faq (last visited Nov. 9, 2011).
163
Id.
156
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25
leagues and customize rankings, recommendations and analysis to the settings of the league.”164
6. Insurers
Finally, there is even an emerging insurance market to protect highstakes fantasy sports participants from monetary loss in the event of an injury to a player on one’s fantasy sports team.165 The first insurance company
to get into the business of fantasy sports was Fantasy Sports Insurance
(“FSI”), which is based out of Long Island, NY.166 Like all traditional insurance policies, FSI insurance policies are underwritten by an A-rated carrier, Lloyd’s of London.167
Currently, FSI policies insure fantasy participants for up to $1,900 in
losses of league entry fees, league transaction fees, and fantasy magazine subscriptions, if the purchaser of the policy has a player on his fantasy team that
misses more than a certain number of games in a season due to injury.168 In
at least one instance, FSI has partnered with a high-stakes fantasy sports host
site, the National Fantasy Baseball Championship, to provide contest participants with the ability to immediately insure one of their players drafted
in that contest.169
IV. LEGAL RISKS FOR FANTASY SPORTS HOST SITES
Although some fantasy sports stakeholders would like their games to
be free from government regulation, the fantasy sports industry today is
indeed subject to a wide range of federal and state laws.170 Most directly,
164
Id.
See Nando Di Fino, A New Kind of Protection, Wall St. J., Sept. 1, 2009,
http://online.wsj.com/article/
SB10001424052970203550604574360691019757738.html.
166
See id.; see also Alex Prewitt, This NFL Insurance Policy is No Fantasy, USA
Today, Aug. 26, 2009, http://www.usatoday.com/sports/football/fantasy/2009-0824-insurance_N.htm?csp=34.
167
See Di Fino, supra note 165; see also Prewitt, supra note 166.
168
See Fantasy Baseball, Fantasy Sports Insurance.com, http://
www.fantasysportsinsurance.com/fantasy-baseball.aspx (last visited Nov. 9, 2011)
(noting that Fantasy Sports Insurance offers insurance policies to protect against
injury to a single player, two players, or three players).
169
See Fantasy Sports Insurance, Nat. Fantasy Baseball Championship, http://
nfbc.stats.com/baseball/insurance.asp (last visited Nov. 9, 2011).
170
165
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fantasy sports host sites must follow federal and state laws related to gaming
activities and intellectual property rights.171
A. State Gambling Law
State gambling law is perhaps the most relevant area of law pertaining
to fantasy sports host sites.172 According to the Merriam-Webster Online Dictionary, “to gamble” is defined as “to play a game for money or property,”
or “to bet on an uncertain outcome.”173 However, in most states, not every
“game for money” or “bet on an uncertain outcome” is defined as illegal
gambling.174 Rather, most states maintain explicit carve-outs that permit
certain activities, such as stock trading, that otherwise would seemingly fall
under the category of gambling.175
1. Is Fantasy Sports Illegal Gambling under State Law?
In most states, a plaintiff can make a prima facie claim of illegal gambling by showing that an activity involves three elements: “consideration,”
171
See Anthony N. Cabot & Louis V. Csoka, Fantasy Sports: One Form of Mainstream Wagering in the United States, 40 J. Marshall L. Rev. 1195, 1202 (2007)
(“[The] natural approach to accessing the legality of fantasy sports is to begin with
an analysis of state laws for two reasons. First, most federal gambling laws were
enacted to help states enforce their own gambling laws. Second, given the complementary [sic] or supplemental nature of federal gambling laws to state gambling
laws, those that first look to the federal laws can sometimes miss the larger theoretical framework underlying these federal laws.”).
173
Gamble Definition, Merriam-Webster.com, http://www.merriam-webster.com/dictionary/gamble (last visited Nov. 9, 2011).
174
See, e.g., Mont. Code Ann. §23-5-802 (2010) (permitting under gambling
law certain fantasy sports games); see also S.E.C. v. J.W. Howrey Co., 328 U.S. 293,
298-99 (1946) (noting that Congress, under the Securities Act of 1933, has insulated from state gambling liability “investment contracts,” which the Supreme
Court has defined as contracts pertaining to transactions “whereby a person [(i)]
invests his money [(ii)] in a common enterprise and [(iii)] is led to expect profits
[(iv)] solely from the efforts of the promoter or a third party . . . .”).
175
See Christine Hurt, Regulating Public Morals and Private Markets: Online Securities Trading, Internet Gambling, and the Speculation Paradox, 86 B.U.L. Rev. 371, 373
(2006) (“To characterize investing as gambling has become a trite and toothless
analogy. However, most worn-out proverbs remain in the conventional wisdom because a kernel of truth continues to resonate with those who need them. In fact, the
stereotype of an investor as a gambler seems particularly well deserved.”).
172
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“reward,” and “chance.”176 Each of these elements has its own distinct
definition.177
The element of “consideration” is described as a “quid pro quo,” or
something in exchange for something else.178 Most courts have construed
the term “consideration” narrowly in the context of gambling, limiting its
definition to instances in which a participant provided money or a valuable
item of property in exchange for the chance of greater winnings.179 However, a minority of courts have adopted the true contract-law meaning of the
word “consideration,” and found that “consideration” involves any legal
detriment, even non-monetary in value, in exchange for the chance to win a
prize.180
176
See Geis v. Cont’l Oil Co., 511 P.2d 725, 727 (1973) (noting, for example,
that under Utah law “the statutory elements of a lottery are: (1) prize; (2) chance;
and (3) any valuable consideration.”); see also McKee v. Foster, 347 P.2d 585, 590
(1959) (noting same under Oregon law); Valentin v. El Diario Prensa, 427
N.Y.S.2d 185, 186 (N.Y.C. Civ. Ct. 1980) (noting that in New York State, three
elements are needed to constitute an illegal lottery: (1) consideration, (2) chance,
and (3) a prize); People v. Hunt, 162 Misc. 2d 70, 71 (N.Y.C. Crim. Ct. 1994)
(“Gambling occurs when a person stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or
influence, upon an agreement or understanding that he will receive something of
value in the event of a certain outcome.”) (internal citations and quotations
omitted).
177
178
Corbin on Contracts § 110; see also Restatement (Second) of Contracts
§ 71 (1981) (“To constitute consideration, a performance or a return promise must
be bargained for. . .The promise may consist of (a) an act other than a promise, or
(b) a forbearance, or (c) the creation, modification, or destruction of a legal relation.”); Thomas D. Crandall & Douglas J. Whaley, Contracts: Cases,
Problems and Materials 137-38 (5th ed. 2008).
179
See, e.g., Albertson’s, Inc. v. Hansen, 600 P.2d 982, 986 (Utah 1979); Cudd
v. Aschenbrenner, 377 P.2d 150, 155-56 (Or. 1962) (finding that participant’s expending of time, effort or inconvenience do not amount to consideration for purposes of Oregon’s anti-gambling statute); Glick v. MTV Networks, 796 F. Supp.
743, 747 (S.D.N.Y. 1992) (noting the New Jersey Attorney General’s position that
under the current New Jersey gambling statute, “legislative intent was to exclude
from the statutory elements composing the gambling offense the sort of personal
inconvenience which will constitute consideration sufficient to support a
contract.”).
180
See State ex rel. Schillberg v. Safeway Stores, Inc., 450 P.2d 949, 953-54
(Wash. 1969) (en banc) (applying simple contract theory as a basis to find consideration in the gaming context); see also Affiliated Enters., Inc. v. Walker, 5 A.2d 257,
259–60 (Del. Super. Ct. 1939) (using Professor Williston’s classic definition of con-
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Similarly, the element of “reward” is the prize that one gets for winning a bet. Courts have held that a reward must be tangible in form.181
However, something tangible, even of small value, is sufficient to constitute
a reward.182
Finally, the element of “chance” is defined as “something that happens
unpredictably without discernible intention or observable cause.”183 In
other words, courts have found that the element of chance requires that a
game’s result be driven not by “judgment, practice, skill or adroitness,” but
rather by factors entirely outside of the participant’s control.184 To determine whether a particular activity satisfies the gambling element of chance,
courts will traditionally apply one of three tests: the “predominant purpose
test,” the “any chance test,” or the “gambling instinct test.”185 The “predominant purpose test,” which is applied by most states, deems an activity
to be one of chance where “greater than 50 percent” of the result is derived
sideration in the contract law context to determine whether consideration was present in a gambling context).
181
See, e.g., State v. 26 Gaming Machs., 356 Ark. 47, 57 (2004) (noting that an
intangible reward, such as viewing a nude woman on a video strip poker game, does
not qualify as a reward for purposes of gambling law).
182
See, e.g., South Carolina Law Enforcement Div. v. 1 Speedmaster S/N 00218,
2001 WL 2139081, at *4 (May 25, 2011).
183
Chance Definition, Merriam-Webster.com, http://www.merriam-webster.com/dictionary/chance (last visited Nov. 7,2011).
184
State v. Gupton, 30 N.C. 271, 273-74 (1848); see also Valentin v. El Diario
Prensa, 427 N.Y.S.2d 185, 187 (N.Y. Civ. Ct. 1980) (noting that a game is best
defined as one of chance if “[t]he winners are not chosen on their personal qualities,
but rather on whether or not their loved ones can get together enough money to
beat the competition in buying sufficient seventeen(¢)-cent coupons.”); People v.
Hunt, 616 N.Y.S.2d 168, 170 (N.Y. Crim. Ct. 1994) (finding that a “contest of
chance is defined as any contest, game, gambling scheme or gaming device in which
the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein.”) (internal citations
omitted); Utah State Fair Ass’n v. Green, 249 P. 1016, 1020 (Utah 1926) (noting
that a Utah state statute describes a game of chance as “a game determined entirely
or in part by lot or mere luck, and in which judgment, practice, skill, or adroitness
have honestly no office at all, are thwarted by chance; a game in which hazard
entirely predominates”).
185
Anthony N. Cabot et al., Alex Rodriguez, A Monkey, and the Game of Scrabble:
The Hazard of Using Illogic to Define Legality of Games of Mixed Skill and Chance, 57
Drake L. Rev. 383, 390–94 (2009) (noting a fourth test, the “material element test,”
which seems to conflate with the predominant purpose test).
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from chance.186 By contrast, the “any chance test” finds that an activity is
based on chance if “a particular game contains any chance that influences
the outcome of the game,”187 and the “gambling instinct test . . . looks to
the nature of an activity to determine if it appeals to one’s gambling
instinct.”188
2. Is Fantasy Sports Illegal Gambling? (Majority View)
A majority of states adopt a liberalized definition of “consideration”
and the “predominant purpose test” as the measure of chance. In these
states, a host site’s risk of liability under state gambling law varies based on
the rules and structure of that particular fantasy sports game.189
On one end of the spectrum, host sites that offer free league entry are
unlikely to violate state gambling laws because those games fail to meet the
element of “consideration.”190 Similarly, fantasy sports games that do not
provide prizes to winners are not likely to violate state gambling laws because they fail to meet the element of “reward.”191 Meanwhile, seasonal and
perennial fantasy sports leagues that initially allocate players via a traditional auction are probably legal because the results of these games are
driven primarily based on skill, rather than chance.192
By contrast, other forms of pay-to-play fantasy sports games present
greater legal risk.193 For example, “modified auction,” “draft,” and
“autopick” leagues are more likely to be categorized as games of chance
because fantasy participants in these leagues are denied the strategic opportunity to bid up the price of certain players based on their presumptions
186
Id. at 392 (citing Dep’t of Corr. v. Worker’s Comp. Appeals Bd., 90 Cal.
Rptr. 2d716, 720 (Cal. Ct. App. 1999) (defining the term “predominant” as
“greater than 50 percent”).
187
Id. at 393.
188
Id. at 393–94.
189
See Cabot & Csoka, supra note 172, at 1207 (arguing that whether a fantasy
sports game is illegal under state gambling law “varies based on the method of play
of the fantasy game at issue”).
190
See, e.g., Humphrey, WL 1797648 at *10 (noting that a minimal entry fee paid
by a fantasy sports participant to a host site to compete in a fantasy sports game was
not consideration for gambling purposes but rather consideration merely for the
day-to-day statistical services provided by the website).
191
See supra notes 178 - 180 and accompanying text.
192
193
30
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about competitor preference.194 In addition, the “draft” method of initially
allocating players includes an additional element of chance with respect to a
participant’s selection order in the fantasy league’s draft.195 Meanwhile, the
“autopick” method is based exclusively on chance, as participants are not
making any independent decisions about player allocation.196
Along these same lines, pay-for-play fantasy sports leagues that extend
for less than a full professional sports season involve substantially greater
levels of chance than full season leagues, and thus also present heightened
risks under state gambling law.197 This is because short-season fantasy
sports games do not extend over a period of time sufficient in length for a
fantasy sports participant’s strategic and negotiating skills to offset “chance
factors such as the physical and mental conditions of players, potential
problems between team members, and the game-time weather conditions.”198 In addition, team-owners in one-day fantasy sports leagues lack
the opportunity to participate in strategic gamesmanship, such as negotiating trades with other owners, or engaging in other “team management”
activities, such as adding or dropping players.199
3. Stricter Views Toward Fantasy Sports
Fantasy sports games, meanwhile, face a far greater risk of liability in a
minority of states that adopt one of four alternative positions.200 First, in
194
See Cabot & Csoka, supra note 172, at 1209 (noting that in auction-based
fantasy sports games, “the fantasy owner must use strategy in assessing the other
team owners. For example, do you risk bidding on players that you do not want
simply to drive up their price and to reduce the amount of money that other teams
have to bid on players that you want? Further, the team owner must prepare to
make adjustments in the course of the draft to accommodate the players chosen and
the price paid.”).
195
196
197
See Joker Club, L.L.C. v. Hardin, 643 S.E.2d 626, 629 (N.C. Ct. App. 2007)
(noting that the length of a game is also an important issue in poker, as in the short
term the game is primarily one of chance, whereas in the long term skill seems to
predominate); cf. Geoffrey T. Hancock, Note, Upstaging U.S. Gaming Law: The Potential Fantasy Sports Quagmire and the Reality of U.S. Gambling Law, 31 T. Jefferson
L. Rev. 317, 349 (2008) (noting that in regular, full-season fantasy sports contexts, the
“prolonged period” of the competition may lead to the conclusion that less luck is
involved).
198
Boswell, supra note 111, at 1265.
199
See Cabot & Csoka, supra note 172, at 1210.
200
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31
states such as Delaware,201 Kansas,202 Michigan,203 Ohio,204 Wisconsin,205
Washington,206 and Vermont,207 fantasy sports encounter a greater risk of
liability because courts in these states have adopted the true contract-law
meaning of the word “consideration.” Thus, in these states, the gamblinglaw element of “consideration” is met, even absent an entry fee, so long as
the contest participant expends substantial time or effort that benefits the
contest’s host in some way.208 Stated in terms of fantasy sports, even if a
host site offers a free fantasy sports game, the game may run afoul of state
gambling law if the elements of “chance” and “reward” are both met.209
Second, fantasy sports host sites face greater risk of liability in states
such as Arkansas,210 Iowa,211 and Tennessee,212 which interpret the element
of “chance” as outlawing games that require any chance (“The Any Chance
Test”).213 In these states, all fantasy sports games would violate the state’s
pertinent gambling laws because even the most intricate fantasy sports game
201
See, e.g., Affiliated Enters., 5 A.2d at 261 (Del. Super. 1939) (finding that
filling out a registration and appearing at a particular lobby, at a particular time, is
sufficient to constitute consideration to enter a free contest).
202
Kan. Stat. Ann § 21-6403(c) (West 2011).
203
See Sproat-Temple Theater Co. v. Colonial Theatrical Enters., 267 N.W 602,
603 (Mich. 1936) (finding that there is consideration even in a free entry contest
when it induces someone to attend an event that they would not otherwise attend).
204
See Kroger Co. v. Cook, 244 N.E.2d 790, 797 (Ohio Ct. App. 1968) (finding
that the element of “consideration” may be met even when entering a free contest
merely based on the advertising benefits derived by the contest’s host).
205
State ex. rel. Regez. v. Blumer, 294 N.W. 491, 492 (Wis. 1940) (defining
“consideration” as “the disadvantage to the one party or the advantage to the
other” and determining the travel to a store to fill out a free entry for a prize met
this definition).
206
See State ex. rel. Schillberg, 450 P.2d at 953–56 (Wash. 1969).
207
See, e.g., State v. Wilson, 196 A. 757, 758–59 (Vt. 1938) (noting that in
Vermont the element of consideration is met as long as some participants pay an
entry fee, even if all participants do not need to pay entry fees).
208
209
210
See State v. Torres, 831 S.W.2d 903, 905 (Ark. 1992).
211
See Parker-Gordon Importing Co. v. Benakis, 238 N.W. 611, 613 (Iowa
1931) (noting that Iowa gambling law finds it irrelevant whether a particular game
is predominantly based chance or skill).
212
See Tenn. Code Ann. § 39-17-501 (2010) (defining “gambling,” subject to
a number of exceptions, as “risking anything of value for a profit whose return is to
any degree contingent on chance”).
213
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involves at least some level of chance with respect to weather conditions and
player injuries.214
Third, fantasy host sites face greater risk of gambling liability in the
states of Florida and Louisiana because, in these states, their attorneys general have already issued advisory opinions cautioning against certain fantasy
games.215 In Florida, former Attorney General Robert A. Butterworth published an advisory opinion in January 1991 that concluded it was illegal to
“participat[e] in a [draft-based] fantasy sports league whereby contestants
pay a fee for the opportunity to select actual professional sports players.”216
Meanwhile, in Louisiana, former Assistant Attorney General Thomas A.
Warner III issued an advisory opinion in April 1991 stating that a commercial fantasy sports game with prizes, which was entered into by the participants dialing a 1-900 telephone number that charged a fee of $2.00 per
minute, violated Louisiana’s state gambling law.217
Finally, fantasy sports host sites face a greater risk of liability in Arizona and Kansas because these states call into doubt the legality of certain
fantasy sports games on their state websites.218 Specifically, Arizona’s Department of Gaming Guide to Off-Reservation Gambling states that “fantasy sports team games are illegal if the host of the event receives a fee for
services provided or if all the pooled money doesn’t go back to the participants.”219 In other words, “[i]f the host takes a percentage of the pooled
money, the Fantasy Sports Team contest is illegal.”220 Meanwhile, Kansas’s
Racing and Gaming Commission website states that “as with any other illegal gambling matters, if a fantasy sports league involves the elements of (1)
prize, (2) chance, and (3) consideration, then it is an illegal ‘lottery’ prohib-
214
See Cabot et. al., supra note 185, at 393.
See Fla. Op. Att’y Gen. 91-3 (1991), available at 1991 WL 528146; La. Op.
Att’y Gen. 91-14 (1991), available at 1991 WL 575105.
216
See Fla. Op. Att’y Gen., supra note 215.
217
See Fla. Op. Att’y. Gen., supra note 215; see also La. Rev. Stat Ann.
§14:90(A)(1)(a)(2011) (stating that “[g]ambling is the intentional conducting, or
directly assisting in the conducting, as a business, of any game, contest, lottery, or
contrivance whereby a person risks the loss of anything of value in order to realize a
profit.”). See generally Jan Moller, Bill to Legalize Online ‘Fantasy’ Sports Games Dies in
House, The Times-Picayune, May 10, 2010, http://www.nola.com/politics/index.ssf/2010/05/bill_to_legalize_online_fantas.html.
218
219
Guide to Off-Reservation Gaming, Arizona Department of Gaming, available at http://www.gm.state.az.us/misc-pdf/TopGamingViolations.pdf.
220
Id.
215
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33
ited by Kansas criminal law.”221 However, because in the Commission’s
opinion “chance predominates over skill in fantasy sports leagues,” “if a
fantasy sports league has a buy-in (no matter what it is called) for its managers and gives a prize, then all three elements of an illegal lottery are satisfied.”222 The language of both the Arizona and Kansas websites indicates
that, in those states, CBS Premium fantasy sports games, as well as many of
the existing high-stakes fantasy sports competitions, are likely illegal.223
4. Montana’s Alternative Test of Fantasy Sports
Finally, the State of Montana provides a different, and perhaps more
insightful, way to test the legality of a particular fantasy sports game.224
Under Montana State Code 23-5-802, it is lawful to conduct or participate
in a fantasy sports league as long as no wagers take place by either the
telephone or internet.225 The Code further defines “fantasy sports leagues”
to include games that meet the following requirements:
any fees for adding or trading players, in total, are less than the league
entry fee;226
the total value of payouts to all league members equals the amount collected for entrance, administrative, and transactions fees, minus payment
for administrative expenses;227 and
the administrative fee for conducting a fantasy sports league, if any, is not
more than 15% of the amount charged as a participant’s entrance fee.228
221
Frequently Asked Questions, Kansas Racing & Gaming Commission, http://
krgc.ks.gov/index.php?id=42#Fantasy Sports (citing Kan. Stat. Ann. § 21-4303
(West 2011)).
222
Id. (stating that, “We do not argue that there are some elements of skill
involved in fantasy leagues. Particularly, fantasy managers must be knowledgeable
of player statistics, and must execute some strategy in selecting the best players for
their fantasy team. On the other hand, a manager leaves to chance a number of
things, including: (1) how a drafted athlete performs in a future event; (2) whether a
drafted player is injured; (3) whether the player’s actual team in a given week executes a game plan that fits the player’s talents; whether the coach calls plays that
favor the player; and (4) how opponents of the actual player (who may be drafted by
another manager) actually play. For those reasons, chance predominates over skill in
fantasy sports leagues.).
223
224
225
Mont. Code Ann. § 23-5-802 (2011).
226
§ 23-5-801(3).
227
§ 23-5-805(1).
228
§ 23-5-805(2)(a).
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When applying the Montana State Code to existing fantasy sports games,
the ESPN and Yahoo! games seem to be free from any liability because they
do not charge entry fees to participants.229 However, the CBS Sports Premium games seem to violate the Montana code because the difference between the total entry fees charged to participants and the total amount paid
back to participants in the prize pool exceeds the 15% maximum threshold
permissible for administrative fees.230 The same problem may also apply to
some of the other high-stakes fantasy sports competitions.231
B. Federal Gambling Law
In addition to state gambling laws, fantasy sports host sites also may
face risks under federal gambling laws. Federal gambling laws serve an
important role in preventing individual states from having their anti-gambling laws circumvented by gambling businesses that are based outside of
state lines.232 While these statutes supplement state gambling law,233 they
do not create immunity from, or reduce the reach of, any individual state’s
laws.234
1. Interstate Wire Act of 1961
One federal statute that is relevant to fantasy sports host sites is the
Interstate Wire Act of 1961 (“Wire Act”).235 The Wire Act bars “engaging
in the business of betting or wagering [through the knowing use of] a wire
communication for the transmission in interstate or foreign commerce.”236
229
231
232
See Mitchell E. Kilby, Note, The Mouse that Roared: Implications of the WTO
Ruling in US – Gambling, 44 Tex. Int’l L.J. 233, 240 (2008); see also Schneider v.
United States, 459 F.2d 540, 542 (8th Cir. 1972) (noting that “[g]ambling activity
conducted in one state may be a federal offense, while the same activity in another
state may not be a federal offense.”).
233
See Vacco v. World Interactive Gaming Corp., 185 Misc. 2d 852, 861 (N.Y.
1999) (discussing overlap between federal and state gambling law).
234
18 U.S.C. § 1084(c) (1994).
235
18 U.S.C. § 1084; see also Kilby, supra note 232, at 239 (discussing implications of the Wire Act).
236
18 U.S.C. § 1084(a) (stating that two elements must be present for a violation of the Wire Act: (1) that information transmitted via wire assisted in placing of
bets or wagers; and (2) the defendant during such time was engaged in businesses of
wagering or betting).
230
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35
According to at least one court, “wire communications” may include not
only telephone communications, but also Internet transactions.237 Violators
of the Wire Act are subject to both fines and imprisonment for a period of
up to two years.238
While there are many instances where courts have found that sports
bookies have violated the Wire Act, there have not yet been any cases that
have applied the Wire Act to fantasy sports leagues.239 Nevertheless, if a
given fantasy sports website were to develop a commercial fantasy sports
game that was deemed to be a “game of chance,” then that website would
potentially face liability under the Wire Act.240
2. Illegal Gambling Business Act
A second statute that potentially places fantasy sports host sites at risk
of liability is the Illegal Gambling Business Act (“Gambling Act”).241 The
Gambling Act, which was passed by Congress in 1970, states that
“[w]hoever conducts, finances, manages, supervises, directs, or owns all or
part of an illegal gambling business shall be fined not more than $20,000 or
imprisoned not more than five years.”242 According to the Gambling Act,
activities of “gambling” include, but are not limited to, “pool-selling,
bookmaking, maintaining slot machines, roulette wheels or dice tables, and
conducting lotteries policy, bolita or number games, or selling chances
therein.”243
In certain respects, the Gambling Act encompasses a broader range of
conduct than does the Wire Act.244 For example, the Gambling Act prohibits certain gambling activities even if they occur without the use of wire
technology.245 Thus, even if a particular court were to find a wireless In237
See Vacco v. World Interactive Gaming Corp., 185 Misc. 2d 852, 860 (N.Y.
1999) (“To the contrary, the Wire Act, Travel Act and Paraphernalia Act all apply
despite the fact that the betting instructions are transmitted from outside the
United States over the Internet.) (emphasis added).
238
18 U.S.C. § 1084(a).
239
See, e.g., Truchinski v. United States, 393 F.2d 627, 631 (8th Cir. 1968).
240
See generally United States v. Bergland, 209 F. Supp. 547, 548 (E.D. Wis.
1962).
241
18 U.S.C. § 1955.
242
18 U.S.C. § 1955(a).
243
18 U.S.C. § 1955(b)(iii).
244
245
See 18 U.S.C. § 1955.
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ternet transaction to lie outside the scope of the Wire Act, the same transaction might fall within the scope of the Gambling Act.246
In other respects, however, the Gambling Act’s scope is narrower than
that of the Wire Act.247 For example, the Gambling Act only targets “illegal gambling activities of major proportions.”248 Thus, the Gambling Act
exempts gambling activities that produce less than $2,000 in daily gross
revenues.249 As a result, it is highly unlikely that any fantasy sports enterprise that avoids Wire Act liability would meet the threshold for liability
under the Gambling Act.250
3. Professional and Amateur Sports Protection Act
A third federal statute that could potentially apply to fantasy sports
host sites is the Professional and Amateur Sports Protection Act
(“PAPSA”).251 After a successful lobbying effort by the professional sports
industry, Congress passed PAPSA in 1992 in response to “growing concerns
over state sponsored gambling on sports.”252 PAPSA, in pertinent part,
makes it illegal for any private person to operate a wagering scheme based
on a competitive game in “which professional or amateur athletes participate.”253 PAPSA, however, includes a grandfather clause that exempts previously authorized government sponsored games as well as casino-style
wagering from liability.254
On its face, it may seem that all fantasy sports lie within the scope of
PAPSA.255 However, that would be an absurdity, as America’s premier professional sports leagues were the chief lobbyists for PAPSA,256 and most
246
Id.
248
United States v. Riehl, 460 F.2d 454, 458 (3d Cir. 1972).
249
18 U.S.C. § 1955(b)(iii).
250
Id.
251
28 U.S.C. § 3701 (1992).
252
See Lee, supra note 5, at 78.
253
28 U.S.C. § 3702(2).
254
See Lee, supra note 5, at 78.
255
28 U.S.C. § 3702.
256
See Mike Freeman, Congress Told Sports Lotteries Threaten Teenagers, Games,
Wash. Post, Jun. 27, 1991, at B5 (noting the “passionate testimony” in support of
PAPSA by commissioners of Major League Baseball, the National Basketball Association and the National Football League).
247
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37
American professional sports leagues both host and endorse seasonal fantasy
sports.257
It is far more likely, however, that PAPSA could be used against daily
and weekly fantasy sports games, as these games have never been formally
endorsed by the professional sports industry. In addition, the substantial
emphasis on buy-ins and payouts in daily fantasy sports games make it more
probable that such games could be viewed as wagering schemes.258
4. Uniform Internet Gambling Act
Finally, in 2006, Congress passed the Uniform Internet Gambling Enforcement Act (“UIGEA”), which made it illegal for those “engaged in the
business of betting or wagering” to “knowingly accept” funds “in connection with the participation of another person in unlawful Internet gambling.”259 The primary purpose of the UIGEA is to supplement “traditional
[gambling] law enforcement mechanisms” and to facilitate the regulating of
“gambling prohibitions or regulations on the Internet, especially where such
gambling crosses State or national borders.”260
Pursuant to the UIGEA, the term “unlawful Internet gambling” involves knowingly transmitting a bet or wager, by means of the Internet,
where the bet or wager is otherwise illegal under the laws of the place where
the bet or wager is “initiated, received, or otherwise made.”261 Thus, if a
person located in a state where gambling is illegal places a bet over the
Internet, any business that knowingly accepts a financial instrument in connection with that bet, irrespective of the gambling business’s location,
would unambiguously be violating the act.262
Whether the Uniform Internet Gambling Enforcement Act applies to
certain fantasy sports host sites remains unsettled.263 On the one hand, the
UIGEA includes an explicit carve-out for “fantasy sports games” that meet
three criteria: (1) the “value of the prizes is not determined by the number
of participants in the game or the amount of fees paid by the participants;”
257
See supra note 129 and accompanying text (showing that most professional
sports leagues even operate their own fantasy sports host sites).
258
See 28 U.S.C. § 3702 (1992).
259
31 U.S.C. § 5363 (2006).
260
Interactive Media Entm’t & Gaming Ass’n v. Att’y Gen. of U.S., 580 F.3d
113, 116 (3d. Cir. 2009).
261
31 U.S.C. § 5362(10)(A).
262
See Interactive Media Entm’t & Gaming Ass’n 580 F.3d at 116.
263
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(2) “[a]ll winning outcomes reflect the relative knowledge and skill of the
participants and are determined predominantly by accumulated statistical
results of the performance of individuals . . . in multiple real-world sporting
events”; and (3) no winning outcome is based on the outcome of the score of
games or on the single performance of an individual athlete in a single, realworld event.264
Nevertheless, it is possible that not all fantasy sports games fulfill this
three-part test. For instance, in daily and weekly fantasy games, “winning
outcomes [may not] reflect the relative knowledge and skill of the participants” because the limited duration of these games heightens the importance of luck in game results.265 Further, as a matter of public policy,
Congress may not want to provide special protection to short-duration fantasy sports games because the shortened duration of these games may feed
the desires of compulsive and addicted gamblers.266
C. Intellectual Property Laws
In addition to the risk of liability under federal and state gambling
law, fantasy sports host sites also risk liability under intellectual property
laws, including patent law, copyright law, trademark law, and right to publicity laws.267
1. Patent Law
Patent law, in general, relates to technological innovations.268 A patent is a form of intellectual property protection that is granted by the federal
government to an inventor to exclude others from making, using, or selling
a particular invention.269 Modern patent law takes root in Article 1, Section
264
31 U.S.C. § 5362(1)(E)(ix)(I)-(III) (2006).
31 U.S.C. § 5362(1)(E)(ix) (II).
266
Boswell, supra note 111, at 1272 (noting that, prior to the creation of shortduration fantasy sports games, fantasy sports leagues may have been viewed as innocuous to society because “these games could only have a substantial negative
affect on the crime rate and the economy if every participant were to compete in a
great number of fantasy games [and such] an occurrence would be logistically impossible due to the amount of time that it takes to effectively compete in a single
fantasy league.”)
267
268
269
See United States Patent and Trademark Office, What is a Patent?,
http://www.uspto.gov/patents/index.jsp (last modified Sep 28, 2011).
265
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39
8 of the U.S. Constitution, which grants the U.S. government the power “to
promote the Progress of Science and useful Arts, by securing for limited
times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”270
Courts have held that certain aspects of fantasy sports games are indeed
patentable.271 For example, in Fantasy Sports Properties, Inc. v. ESPN/Starwave
Partners, the Federal Circuit found a genuine issue of relevant fact as to
whether CBS Sports (F/K/A Sportsline) infringed on a patent relating to “a
method of and apparatus for playing a ‘fantasy’ football game on a computer,” whereby players earned “additional points awarded beyond those
given in an actual football game for unusual scoring plays, such as when a
player scores in a manner not typically associated with his position.”272
Based on the court’s reasoning in Fantasy Sports Properties, all fantasy
sports host sites need to ensure that their products do not allow users to
exploit scoring methods that have already been patented.273 In addition,
fantasy sports games that adopt unusual methods of scoring may wish to
seek patent protection for their own methodologies as a way to secure a
comparative advantage over competitor host sites.274
2. Copyright Law
Copyright law, meanwhile, relates to content.275 Like a patent, a copyright is a form of intellectual property protection grounded in the U.S. Constitution.276 A copyright protects “original works of authorship fixed in a
tangible medium of expression.”277 While a copyright covers both published and unpublished works, it does not protect “facts, ideas, systems, or
methods of operation.”278
Fantasy sports host sites do not have to worry about copyright issues
when publishing player statistics because player statistics are factual in na270
U.S. Const. art. I, § 8, cl. 8.
272
287 F.3d at 1111, 1114 (Fed. Cir. 2002).
273
274
275
276
See Copyright in General (FAQ), U.S. Copyright Office, http://
www.copyright.gov/help/faq/faq-general.html (revised Jul. 12, 2006).
277
Id.
278
Id.
271
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ture, and once published are deemed to lie within the public domain.279
Nonetheless, fantasy sports host sites still need to ensure that their additional content, such as stories and illustrations, do not violate another site’s
copyright.280 In addition, if a fantasy sports host site believes another website is violating its copyrighted material, it is imperative for the fantasy host
site to immediately send out a cease-and-desist letter (commonly known as a
“notice and take down” letter) and to not sit on its rights.281
3. Trademark Law
Trademarks are a third form of intellectual property protection that
provides consumers with a sense of certainty about a particular product’s
source, and allows holders to “develop and control the goodwill associated
with a given product.”282 A federal cause of action for trademark infringement typically accrues under Section 32(1) of the Lanham Act where “a
person uses (1) any reproduction . . . of a mark; (2) without the registrant’s
consent; (3) in commerce; (4) in connection with the sale, offering for sale,
distribution or advertising of any goods; (5) where such use is likely to cause
confusion, or to cause mistake or to deceive.”283 In addition, some courts
have found that, even absent the element of confusion, the Lanham Act prevents both individuals and businesses from capitalizing on the goodwill of
another’s trademark.284
279
See C.B.C. Distribution & Marketing Inc. v. Major League Baseball Advanced
Media, 505 F.3d 818, 823 (8th Cir. 2007) (“The information used in CBC’s fantasy
baseball games is all readily available in the public domain.”).
280
Cf. Copyright in General (FAQ), supra note 276.
281
See Joy Butler, Responding to Stolen Content with a DMCA Take-Down Letter,
Guide Through the Legal Jungle, http://www.guidethroughthelegaljungleblog.
com/2009/04 /responding-to-stolen-content-with-a- dmca-take-down-letter.html
(intellectual property attorney and Harvard Law School graduate Joy Butler discusses best practices for responding to the use of “stolen content” on the Internet).
282
See Mark A. Kahn, May the Best Merchandise Win: The Law of Non-Trademark
Uses of Sports Logos, 14 Marq. Sports L. Rev. 283, 284 (2004). “Goodwill” is not
an easily defined term. Id. at 288. However, one court has defined it as “the
favorable consideration shown by the purchasing public to goods known to emanate
from a particular source.” White Tower Sys. v. White Castle Sys. Of Eating Houses
Corp., 90 F.2d 67, 69 (6th Cir. 1937).
283
Boston Prof’l Hockey Ass’n v. Dallas Cap & Emblem Mfg. Inc., 510 F.2d
1004, 1009–10 (5th Cir. 1975).
284
Id. at 1012–13 (preventing Dallas Cap & Emblem Manufacturing from using
NHL team trademarks on apparel); Univ. of Georgia Athletic Ass’n v. Laite, 756
F.2d 1535, 1547 (11th Cir. 1985) (preventing a wholesaler of novelty beers from
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41
Sports teams have been one of the more successful parties at using the
courts to prevent the misappropriation of the goodwill of their marks.285
Most notably, in Boston Professional Hockey Association v. Dallas Cap & Emblem
Manufacturing, the National Hockey League teams convinced the U.S. Court
of Appeals for the Fifth Circuit that the court should award trademark protection against the unauthorized use of their logos on sportswear apparel,
even though consumers were not necessarily confused about the apparel’s
source or origin.286 In that case, the court concluded that trademark protection extends to the need to protect “the major commercial value of [sports
teams’] emblems [which is] derived from the efforts of [the teams].”287
Nevertheless, trademark protection rarely extends to the use of another’s mark for purposes of non-commercial speech, which is deemed by the
courts to be “fair use.”288 While the fine line separating commercial speech
from fair use has often been a source of more confusion than clarity,289 the
U.S. Court of Appeals for the Second Circuit currently applies a balancing
using a symbol of an English bulldog wearing a sweater emblazoned with the letter
“G” because it appeared too similar to the University of Georgia Bulldogs logo).
285
286
Boston Prof’l Hockey Ass’n., 510F.2d at 1012–13 (5th Cir. 1975).
287
Id. at 1011; see also Univ. of Ga. Athletic Ass’n, 756 F.2d at 1546–47 (noting
that a likelihood of confusion may be demonstrated by showing confusion among
consumers as to the sponsorship of the mark). In University of Georgia Athletic Association, the Eleventh Circuit upheld the finding of a Lanham Act violation against
Battlin’ Bulldog Beer for distributing a novelty beer with a logo that strongly resembled the Georgia Bulldog. Id. at 1536–39. According to the court, “confusion
stems not from the defendant’s unfair competition with the plaintiff’s products, but
from the defendant’s misuse of the plaintiff’s reputation and good will as embodied
in the plaintiff’s marks.” Id. at 1547. In addition, no disclaimer can save a party
that misuses the reputation of good will of another’s marks because “[o]nly a prohibition of the unauthorized use will sufficiently remedy the wrong.” Id.
288
4 Calmann on Unfair Competition, Trademarks & Monopolies §22.59
(4th ed. 2011); see also Atlanta Civil Liberties Union of Georgia v. Miller, 977 F.
Supp. 1228, 1233, n. 6 (N.D.Ga. 1997) (“Congress acknowledged the first amendment problems with banning non-commercial use of trademarks); JA Apparel Corp.,
682 F. Supp. 2d at 309 (“The fair use defense, which allows for some level of
confusion, is an absolute defense to claims of trademark infringement, trademark
dilution, and false designation of origin.”). See generally id. at 309–10 (citing CarFreshner Corp. v. S.C. Johnson & Sons, Inc., 70 F.3d 267, 269 (2d. Cir. 1995))
(holding that a court will assess three factors in order to determine “fair use”: (1)
whether the mark is use descriptively; (2) whether the mark is used to indicate the
origin of consumer products; and (3) whether the mark is being used in good faith).
289
Compare Rogers v. Grimaldi, 875 F.2d 994, 999 (2d. Cir. 1989) (using a
balancing test to weigh “the public interest in avoiding consumer confusion”
against the public interest in free speech) with Facenda v. NFL Films, Inc., 542 F.3d
42
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test that weighs the public’s interest in avoiding consumer confusion,
against the public’s interest in free expression.290 Meanwhile, the U.S.
Court of Appeals for the Third Circuit has expressed support for a test that
places a somewhat stronger burden on the non-trademark holding party.291
With lingering disagreement among the circuits about where depreciation of a trademark holder’s goodwill ceases and fair use begins, fantasy
sports host sites are best advised to minimize their legal risk under the Lanham Act by avoiding the use of actual sports teams’ logos without a license.292 Additionally, in instances where fantasy sports host sites seek to
identify a professional sports team by name, the host site should either obtain a license, or reference the team’s name in small print, while having its
own site’s name and marks appearing far more conspicuously.293
4. Right to Publicity
Finally, state “right of publicity” laws govern the use of names and
identifying characteristics of famous individuals.294 Right of publicity laws
are derived from the common law right to privacy, which is grounded in
both property law and tort law.295 Today, publicity rights are defined by
Black’s Law Dictionary as “the right to control the use of one’s own name,
picture, or likeness and to prevent another from using it for commercial
benefit without one’s consent.”296 In addition, according to the Supreme
Court, the right of publicity serves as “an economic incentive for [one] to
1007, 1018 (3d. Cir. 2008) (“[W]e need not reach the issue whether our Court will
adopt the Rogers test.”).
290
See Rogers 875 F.2d at 999.
291
See Facenda, 542 F.3d at 1019.
292
Cf., supra, notes 288 - 291 and accompanying text.
293
See JA Apparel Corp., 682 F.Supp. 2d at 313–14, 316 (noting that where a
company places its own trademark in far larger and more noticeable font than another’s trademark, it “arguably removes the likelihood of any confusion”).
294
See William Sloan Coats & Kenneth Maikish, The Right of Publicity: Proper
Licensing of Celebrity Endorsements, 1025 PLI/Pat 269, 279 (2010) (noting that
“[c]urrently, nineteen states, including California and New York, protect the right
of publicity via statute . . . an additional twenty-eight states recognize the right via
common law.”); see also C.B.C. Distrib. & Mktg. Inc., 505 F.3d at 822 (“An action
based on the right of publicity is a state-law claim.”).
295
See generally Keller v. Electronic Arts Inc., No. C 09-1967 CW., 2010 WL
530108, at *3 (N.D. Cal. Feb. 8, 2010) (“The statutory right of publicity complements the common law right of publicity, which arises from the misappropriation
tort derived from the law of privacy.”).
296
Black’s Law Dictionary (9th ed. 2009).
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43
make the investment required to [perform a skill] of interest to the
public.”297
Whether a fantasy sports game’s unauthorized use of players’ names
and statistical information would violate state right of publicity laws remains an unsettled issue on which the Supreme Court has not yet spoken.298
The strongest argument that the unlicensed use of players’ names and statistics in a fantasy sports game violates athletes’ publicity rights comes from
Gridiron.com v. National Football Players Association, a case in which the U.S.
District Court for the Southern District of Florida rejected the argument
that a website operator may use players’ names and images for the purposes
of selling football memorabilia and operating a fantasy sports game.299
By contrast, the strongest argument in favor of a fantasy sports host
site’s right to use players names and statistics without a license comes from
the 2008 case C.B.C. Distribution & Marketing Inc. v. Major League Baseball
Advanced Media, in which the U.S. Court of Appeals for the Eighth Circuit
held that the First Amendment trumps Major League Baseball players’ assignable right to publicity in their names and statistics.300 This split in
297
Zacchini v. Scripps-Howard Broad. Co., 433 U.S. 562, 576 (1976); see also
Haelan Lab. Inc. v. Topps Chewing Gum, Inc., 202 F.3d 866, 877 (2d. Cir. 1953)
(“[I]t is common knowledge that many prominent persons far from having their
feelings bruised through public exposure of their likeness, would feel sorely deprived if they no longer received money for authorizing advertisements, popularizing their countenances, displayed in newspapers, magazines, busses, trains and
subways. This right of publicity would usually yield them no money unless it could
be made the subject of an exclusive grant, which barred any other advertiser from
using their pictures.”).
298
299
106 F. Supp. 2d 1309, 1315 (S.D. Fla. 2000) (“Plaintiff actively sought out
and obtained over 150 NFL Player’s publicity rights, and now argues that the information the websites produce are entitled to Free Speech protection. Plaintiff’s argument is not persuasive.”).
300
505 F.3d 818 (8th Cir. 2007). According to the Eighth Circuit view, the
First Amendment trumped the right of publicity in fantasy sports cases for three
reasons. First, the information used in the fantasy baseball games is already in the
public domain. Id. at 823. Second, baseball players whose names appear in these
games “are rewarded separately for their labors.” Id. at 824 (noting, in separate
paragraphs, the athletes’ compensation through their salaries and compensation
through other endorsement opportunities). Finally, consumers of fantasy products
are not misled by the use of baseball players’ names and information into believing
the players are endorsing a particular fantasy sports game. Id. at 824. Thereafter, in
CBS Interactive Inc. v. National Football League Players Association, the U.S. District
Court for the District of Minnesota (a lower court within the Eighth Circuit) held
that a fantasy sports host site did not need a license to use National Football League
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authority has not only led to some confusion for fantasy sports businesses,
but also potentially invites the practice of “forum shopping” by plaintiffs.301
In addition, even if a court were to conclude that the First Amendment
trumps the right of publicity with respect to the use of professional athletes’
names and statistics, that same court might rule differently where the fantasy sports game involves college athletes.302 This is because, unlike professional athletes, who “are rewarded separately for their labors,”303 collegiate
athletes are not otherwise compensated based on their fame.304 Thus, the
American legal system has an especially strong interest in protecting the
proprietary nature of the collegiate athlete’s right to publicity.305
players’ names and statistics in its fantasy football game. See 259 F.R.D. 398, 419
(D. Minn. 2009) (“Because the Eighth Circuit’s decision in C.B.C. Distribution is
controlling, CBS Interactive is entitled to judgment as a matter of law.”).
301
Eric J. Goodman, A National Identity Crisis: The Need for a Federal Right of
Publicity Statute, 9 DePaul-LCA J. of Art & Ent. L. 227, 244 (1999). Absent the
creation of a unified, federal right to publicity, there indeed are a number of possible ways that a court could determine which state’s right to publicity laws should
apply, including: (1) the player’s domicile; (2) the location where the players union
is located; (3) the location of the alleged infringement; or (4) simply the law of the
forum. See, e.g., Keller, 2010 WL 530108, at *2 (N.D. Cal. Feb. 8, 2010) (“Plaintiff alleges that NCAA violated his Indiana right of publicity. He argues that Indiana law applies to NCAA because its headquarters are located in Indiana and the alleged
violation occurred in Indiana.”) (emphasis added). It is interesting to note that in the
class action suit Keller v. Electronic Arts, the plaintiff class, which brought suit in the
U.S. District Court for the Northern District of California, argued not only a breach
of California’s statutory and common law right to publicity law, but also those of
Indiana: presumably based on the belief that Indiana’s law, based on its broad purported applicability, would apply to all class members. See Complaint, Keller v.
Electronic Arts, LEXSEE 2009 U.S. Dist. Pleadings 368791, at *26-27, ¶ 17-28
(May 5, 2009).
302
See infra notes 303 - 305 and accompanying text; see also Christian Dennie,
Note, Tebow Drops Back to Pass: Videogames have Crossed the Line, but Does the Right of
Publicity Protect Student-Athlete’s Likeness When Balanced Against the First Amendment?,
62 Ark.L. Rev. 645, 673 (2009) (“The fact that student-athletes are not paid may
actually work in favor of a student-athlete’s argument that he or she is entitled to
right-of-publicity protection.”).
303
C.B.C. Distrib. & Mktg. Inc, 505 F.3d at 824.
304
See Marc Edelman, Note, Reevaluating Amateurism Standards in Men’s College
Basketball, 35 U. Mich. J.L. Reform 861, 862 (2002).
305
See Zacchini, 433 U.S. at 573 (noting “the State’s interest in permitting a
‘right of publicity’ is in protecting the proprietary interest of the individual in his
act in part to encourage such entertainment”).
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45
V. LEGAL RISKS FOR FANTASY SPORTS PARTICIPANTS
While fantasy sports host sites face numerous legal issues related to
their business practices,306 they are not the only stakeholder group potentially subject to liability for their engagement in fantasy sports.307 Fantasy
sports participants also face some degree of legal risk, albeit to a far lesser
extent.308
A. Criminal Liability under Gambling Laws
Unlike fantasy sports host sites, fantasy league participants have minimal risk of violating federal gambling laws because they are unlikely to be
deemed to be “engaged in the business of wagering or gambling.”309 Much
like the operators of their host sites, however, fantasy sports participants
bear some risk, albeit small, of running afoul of states’ criminal gambling
statutes.310
The earliest known criminal lawsuit involving a fantasy sports participant took place in Fort Lauderdale, Florida in 1991, when a local firefighter
and fantasy baseball player, Randy Bramos, was charged with a misdemeanor gambling offense for running a 12-team fantasy baseball league involving $5,000 in league entry fees.311 These charges, however, were
eventually dropped.312 Since then, there have not been any other instances
of charges filed against fantasy sports participants.313
306
308
309
18 U.S.C. § 1084(a) (1994) (emphasis added); see also United States v.
Becker, 461 F.2d 230, 232 (2d. Cir. 1972), vacated on other grounds by 417 U.S. 903
(1974) (internal citations and quotations omitted) (noting that illegal “conduct”
under the Illegal Gambling Business Act “does not include the player in an illegal
game of chance, nor the person who participates in an illegal gambling activity by
placing a bet); Kilby, supra note 232 at 240–41 (noting that the Wire Act only
applies to those “engaged in the business of betting” and not to individual gamblers). But see generally United States v. Crockett, 514 F.2d 64, 75 (5th Cir. 1975)
(noting that customers who are in effect partners in the operation of an illegal gambling business are within the scope of the Illegal Gambling Business Act).
310
311
See Skolnick, supra note 29 at 11B.
312
Id.
313
See id.; see also Robert J. Nobile, Human Resources Guide § 5:12.50 (Dec.
2010) (“While technically illegal, it is virtually unheard of for someone to get arrested, prosecuted and convicted for taking part in an office pool.”).
307
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B. Civil Liability for Gambling Activities
Fantasy sports participants also risk disgorgement of their gambling
winnings under civil anti-gambling statutes.314 These civil anti-gambling
statutes, which derive from England’s 1710 Statute of Queen Anne,315 assert
that, as a matter of public policy, a gambling winner “shall not be protected
in his unlawful gains,” and a gambling loser or gambling informer “may
sue to recover back the money lost.”316 In addition, most states that recognize disgorgement statutes refuse to allow gamblers to opt out of their home
state’s choice of gambling law.317 This is because states that enforce disgorgement statutes are trying to prevent gambling losers from becoming
wards of the state due to their risky financial behavior.318
Although one recent case has held that fantasy sports host sites are
immune from civil liability because they are neither “participants” nor
“winners” in gambling activities,319 the same conclusion does not necessarily extend to fantasy participants in leagues that, under state law, are
deemed to be gambling (meaning those found to involve consideration,
chance, and reward).320
C. Violating Company Anti-Solicitation Policies
Fantasy sports participants, on a more remote level, also are subject to
termination of their employment if found to be soliciting other employees
314
See, e.g., Ga. Code Ann. § 13-8-3(b) (West 2011); Ohio Rev. Code Ann.
3763.02 (West 2011).
315
Humphrey, 2007 WL 1797648, at *3.
316
Hardin v. NBC Universal, Inc., 283 Ga. 477, 478 (2008).
317
See, e.g., In re Baum, 386 B.R. 649, 657 (Bankr. N.D. Ohio 2008) (noting
some courts that do not enforce anti-gambling contracts will not allow gamblers to
uphold these contracts based on out-of-state choice-of-law clauses).
318
See generally supra note 317 and accompanying text.
319
Humphrey, 2007 WL 1797648, at *9-10; see also id. at *7 (noting that fantasy
sports host sites are not winners in a gambling activity but rather are “neutral
parties in the fantasy sports games” that do not compete for prizes, and are indifferent about who wins the prizes.”).
320
See generally Salamon v. Taft Broadcasting Co., 475 N.E.2d 1292, 1297 (Ohio
Ct. App. 1984) (noting that Ohio’s civil anti-gambling statute gives a stranger to a
particular gambling transaction the “right to recover only the money actually lost,
and only from the winner”).
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47
to participate in their fantasy sports games during work hours, in violation
of company policy.321
While some employers might oppose fantasy sports games based on the
lost productivity of workers who spend time looking at their fantasy sports
teams during the work day,322 other employers may disallow soliciting
membership in fantasy sports leagues for reasons grounded in labor law.323
According to the Human Resources Handbook, any employer that seeks to
disallow union solicitations in the workplace must, pursuant to the National
Labor Relations Act, maintain a broader, content-neutral ban on solicitations.324 Such a broad, content-neutral ban would logically extend to fantasy sports.325 For instance, in Webco Industries, Inc. v. NLRB, the U.S. Court
of Appeals for the Tenth Circuit upheld a National Labor Relations Board
finding that a no-solicitation policy was “selectively enforced with discriminatory intent” and thus impermissible because a company disallowed employees from soliciting union membership, but allowed employees to solicit
each other for “recreational activities (such as sporting event pools, fantasy
football, and baseball leagues).”326
D. Bankruptcy
Finally, even if fantasy sports participants are insulated from gambling
prosecution under most federal and state laws, high-stakes fantasy sports
participants still run a heightened risk of bankruptcy based on their financially risky behavior.327 One of the reasons why some fantasy sports participants may run a heightened risk of bankruptcy is because, like compulsive
poker players and slot machine users, they “get addicted” to the gambling
aspects of fantasy sports and gamble incessantly on short-duration fantasy
321
Nobile, supra note 313.
Vecchione, supra note 58 at 1698.
323
324
See Nobile supra, note 313 (“Although a company’s non-solicitation policy
may not be violative of the NLRA, if it selectively enforces this policy by tolerating
some solicitation (such as solicitations for office pools, fantasy sports, etc.) but not
union solicitation, it will likely – with some limited exceptions – be found to have
violated the NLRA by discriminating against the union.”).
325
See Nobile, supra note 313.
326
217 F.3d 1306, 1312 (10th Cir. 2000).
327
See In re Baum, 86 B.R. 649 (Bankr. N. D. Ohio Feb 29, 2008) (case in which
a parties’ excessive Internet gambling led to bankruptcy); see also Hancock, supra
note 20, at 348 (“Studies show increased debt in areas of legalized gambling.”).
322
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sports contests.328 Indeed, “pathological gambling” is one of the few forms
of addiction currently recognized by the fourth edition of the Diagnostic
and Statistical Manual of Mental Disorders (DSM-IV).329
Other fantasy sports participants, meanwhile, may wager incessantly on
short-duration fantasy sports contests because they suffer from Internet addiction, which “can be a symptom of other mental illness, or conditions like
autism.”330 Although Internet addiction is not a recognized form of addiction under DSM-IV, Dr. Jerald Block of the Oregon Health Sciences University in Portland notes that “[a]mong psychiatrists there is general
recognition that many patients have difficulty controlling their impulses to
chat online, or play computer games.”331
VI. LEGAL RISKS FOR ANCILLARY FANTASY SPORTS BUSINESSES
Finally, various ancillary fantasy sports businesses also may risk legal
liability if their business owners fail to knowledgably structure business
activities.332
A. Fantasy Sports Treasury Sites
Fantasy sports treasury sites bear two forms of potential liability: suits
from fantasy sports participants for failure to turn over contested winnings,
and challenges from a broader range of plaintiffs alleging a Wire Act
violation.333
Where a fantasy sports treasury site fails to turn over contested winnings to the proper league participant, liability may follow.334 This is because the treasurer/participant relationship is comparable to one of bank and
328
Fantasy Sports: A Booming Business, supra note 53, at B1; c;f. King, supra note
51, at 71 (Advocates of banning online gaming argue that it “is harmful to minors,
a source or bankruptcy and addiction among adults, and a means for illegal money
laundering.”).
329
Genes Play a Role in Problem Gambling, Myaddiction.com (Jun. 9, 2010),
http://www.myaddiction.com/news/gambling-addiction-news/genes-play-a-role-inproblem-gambling.
330
Nicholas K. Geranios, Treatment One Click at a Time: Internet Addiction,
Charleston Gazette & Daily Mail, Sept. 4, 2009, at 1A, available at 2009 WLNR
17614750.
331
Id.
332
333
334
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49
customer, in which “the bank is indebted to the customer and promises to
debit his account only at [the customer’s] direction.”335 Thus, “[i]f the
bank pays, on an instrument drawn by its customer, any person other than
the designated payee or a person to whom the instrument is negotiated, the
bank’s indebtedness to the customer is not diminished.”336
In addition, if a particular fantasy sports game is deemed to be gambling, there is a remote argument that the affiliated fantasy sports treasury
website, in collecting and dispersing funds, may be found to be in violation
of the Wire Act.337 This is based on the argument that by collecting league
entry fees and distributing prize money over a wired Internet, these treasury
sites are “engaging in the business of betting or wagering.”338
B. Fantasy Sports Advisors
Fantasy sports advisors, meanwhile, risk liability under both tort law
and contract law, if they fail to meet promised standards.339 Under tort law,
fantasy sports advisors risk liability if they negligently supply misinformation that is used in a business transaction, even if that information is not
sold directly to the party that suffers a financial loss as a result.340 For example, Section 552 of the Restatement of Torts describes the tort of “information negligently supplied for the guidance of others” as occurring if “[o]ne
who in the course of his business or profession supplies information for the
guidance of others in their business transactions [and] fails to exercise that
care and competence . . . which its recipient is justified in expecting.”341
Under contract law, if a fantasy sports participant purchases advisory
services that are not performed as warranted, the fantasy sports participant
335
Cooper v. Union Bank, 9 Cal. 3d 371, 377 (1973).
Id.
337
See id.
338
18 U.S.C. § 1084(a) (1994). Two elements must be present for a violation of
the Wire Act: (1) that information transmitted via wire assisted in placing of bets or
wagers; and (2) the defendant during such time was engaged in businesses of wagering or betting. Truchinski, 393 F.2d at 630.
339
340
See generally Restatement (First) of Torts § 552 (2011) (discussing the
tort of “Information Negligently Supplied for the Guidance of Others); see also Oddi
v. Avco Corp., 947 F.2d 257 (7th Cir. 1991) (finding financial advisor liable for an
error in “simple number crunching”).
341
Restatement (First) of Torts § 552 (2011).
336
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may attempt to sue their advisors for breach of an express warranty.342 In
addition, where an advisory service provides advice in the form of an analytical tool, such a tool might be deemed to be a “good” under the Uniform
Commercial Code,343 and thus the purchaser may sue additionally if the tool
fails to meet either an implied warranty of merchantability,344 or an implied
warranty of fitness for a particular purpose.345
Given these contract-law risks, fantasy sports advisors are always best
advised to try to minimize their potential liabilities by drafting clear “disclaimers.”346 One of the better disclaimers of liability in the context of
fantasy sports advice appears on the Bloomberg Sports website under its
Terms and Conditions of Service.347 This disclaimer requires all users to
“bear all risks associated with the use of such material, including, without
limitation, any reliance on the accuracy, completeness, or usefulness of such
material,” and to agree that “neither Bloomberg nor its affiliates make any
warranty of any kind, express or implied, as to the services or results to be
attained . . . [and] disclaims all express or implied warranties.”348 In many
courts such a disclaimer if clear and conspicuous would be deemed valid.
342
See CBS Inc. v. Ziff-Davis Publ. Co., 75 N.Y.2d 496, 503 (1990) (defining a
contractual warranty as “an assurance by one party to a contract of the existence of a
fact upon which the other party may rely”).
343
Many courts have held that computer software qualifies as a “good” under
Article 2 of the Uniform Commercial Code (UCC) and thus contracts for analytical
tools, such as those provided by Bloomberg Sports, will most likely be interpreted
based on the UCC, where adopted by the relevant state. See, e.g., Advent Sys., Ltd.
v. Unisys Corp., 925 F.2d 670, 675 (3rd Cir. 1991) (finding computer software
subject to Article 2 of the UCC because the fact that a computer program “may be
copyrightable as intellectual property does not alter the fact that once in the form of
a floppy disc or other medium, the program is tangible, moveable and available in
the marketplace”); but see Pearl Invs., LLC v. Standard I/O, Inc., 257 F. Supp. 2d
326, 353 (D. Me. 2003) (If the computer software in question is custom designed, a
court may find the predominant purpose of the transaction was the design services).
344
U.C.C. § 2-314 (1992).
345
U.C.C. § 2-315 (1992).
346
See U.C.C. §§ 2-316, (noting, in the context of goods, the possibility of disclaiming warranties); Burr v. Sherwin Williams Co., 268 P.2d 1041, 1049 (1954)
(If a merchant wishes to do so, he must disclaim warranties in a way that makes it
clearly known to the buyer.).
347
Bloombergsports.com, https://www.bloombergsports.com/frontoffice
(click on terms of service) (last visited October 21, 2011).
348
Id.
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51
C. Fantasy Sports Insurance
Similarly, fantasy-sports insurance businesses need to ensure that their
services are deemed, under state law, to be bona fide insurance contracts and
not a disguised form of illegal gambling.349 Under most state laws, bona
fide insurance contracts must conform to two doctrines: the “doctrine of
insurable interest” and the “principle of indemnity.”350 The “doctrine of
insurable interest” requires that any insurance contract involve “some significant relationship between the insured and the person, the object, or the
activity that is the subject of an insurance transaction.”351 Thus, in applying the “doctrine of insurable interest,” a court will void an insurance contract “where an insurance policy is obtained by a party who has no interest
in the subject of the insurance.”352 In addition, the principle of indemnity
requires that “the amount of insurance benefits paid when a loss is sustained
by an insured party is not to exceed the economic measure of the loss.”353
According to one treatise on insurance law, “among the potential evils that
were originally regarded as an undesirable consequence of insurance contracts which permitted a net gain by an insured was the prospect that such
transactions would be used for gambling.”354
Fantasy sports insurance presents a close call under the “doctrine of
insurable risk.”355 On the one hand, sports participants have no direct relationships to the lives or health of the players on their fantasy sports teams.
349
Robert E. Keeton & Alan I. Widiss, Insurance Law: A Guide To Fundamental Principles, Legal Doctrines, and Commercial Practices §8.1(a), 930
(Student ed., West Publ. Co., 1988) (“In the United States, administrative regulation of insurance has been and continues to be primarily the responsibilities of state
authorities.”).
350
See infra notes 351 - 354 an accompanying text.
351
Keeton & Widiss, supra note 349, at 135–36.
352
Ruse v. Mutual Ben. Life Ins. Co., 26 Barb. 556, 561 (N.Y. 1861) (voiding
an insurance policy where the party taking the policy has no interest in the life of
the insured).
353
Keeton & Widiss, supra note 349, at 135 (noting that it “is now a generally
accepted fundamental tenet of insurance law that opportunities for net gain to an
insured through the receipt of insurance proceeds exceeding a loss should be regarded as inimical to the public interest.”).
354
Keeton & Widiss, supra note 349, at 136- 37 (“[I]nsurance transactions that
appeared to be wagers generally were declared to be illegal in the United States by
judicial action, even though there was usually no basis for these decisions in statutory prohibitions.”).
355
Id. at 135-36.
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However, fantasy sports participants seem to have a real financial stake in a
property right pertaining to the statistical output of these athletes.
Fantasy sports insurance also presents some uncertainty under the
“doctrine of indemnity.”356 To meet the requirements of this doctrine, fantasy sports insurance agencies need to make sure that their ultimate payout
never exceeds the difference between the expected winnings of a given fantasy sports owner if a particular player remains healthy throughout the season, and the expected winnings of that same fantasy sports owner given the
occurrence of the insurable event.
D. Fantasy Sports Dispute Resolution
Finally, fantasy dispute resolution services face the lowest risk of legal
liability among ancillary fantasy sports businesses.357 Any decision provided
by a fantasy sports dispute resolution service may be challenged in the
courts, on the basis that the dispute arbitrator acted arbitrarily, capriciously,
fraudulently, or in violation of public policy.358 Nevertheless, the courts
will probably look favorably upon fantasy sports dispute resolution services
because these services not only allow courts to avoid using their limited
resources on resolving fantasy sports disputes, but also allow courts to avoid
“becom[ing] marred down in what has been called the ‘dismal swamp’” of a
particular private association’s rules.359
VII. CONCLUSION
When Daniel Okrent hosted the inaugural Rotisserie League baseball
draft in April 1980, there was little need for him to consider how legal risks
applied to his “goofy” competition.360 However, with the fantasy sports
industry today valued at $5 billion, an understanding of the legal risks that
apply to fantasy sports games has become imperative.
356
Id. (noting that it “is now a generally accepted fundamental tenet of insurance law that opportunities for net gain to an insured through the receipt of insurance proceeds exceeding a loss should be regarded as inimical to the public
interest.”).
357
358
See, e.g., Aviles v. Charles Schwab & Co., 2010 WL 1433369 (S.D.Fla 2010),
at *7 (discussing grounds for challenging a neutral arbitrator’s decision both under
the Federal Arbitration Act and under common law).
359
Crouch v. National Ass’n for Stock Car Auto Racing, 845 F.2d 397, 403 (2d.
Cir. 1988).
360
Townsend, supra note 25, at 1C.
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53
For fantasy sports host sites, one source of legal risk emerges from U.S.
gambling laws. While there are few court opinions that address how gambling laws apply to fantasy sports host sites, host sites can nevertheless minimize their potential liability under gambling laws by structuring contests in
a way that either (1) does not award prizes or (2) allocates players through a
“traditional auction,” and lasts for at least a full professional sports season.
Another source of legal risk comes from intellectual property laws.
Host sites can minimize their intellectual property risks by ensuring that
their game scoring systems do not infringe on existing patents and that their
written and illustrated content does not infringe on existing copyrights, as
well as by obtaining licenses from the requisite players associations before
using player names in their games, and obtaining licenses from the requisite
sports leagues before using individual team trademarks.
For fantasy sports participants, the main source of legal risk entails the
possible disgorgement of fantasy winnings under Queen Anne statutes,
which disallow winners in gambling contests from keeping prize money.
Fantasy sports participants should avoid competing in high-stakes fantasy
leagues in states that maintain Queen Anne statutes.
Fantasy sports participants are also at a potentially heightened risk of
unemployment and bankruptcy. Thus, fantasy sports participants should
familiarize themselves with workplace policies related to participating and
soliciting participation in fantasy sports leagues, as well as with how, if at
all, fantasy sports entry fees would compromise their personal finances.
For ancillary fantasy sports businesses, their main legal risks relate to
gambling laws, as well as traditional contract and tort law. Specifically,
fantasy sports treasury sites risk liability if they fail to properly turn over
winnings or they collect and dispense funds in a way that violates the Wire
Act. Fantasy sports advisory sites risk liability under both tort and contract
law if their websites make inaccurate representations about their services.
Fantasy sports insurance businesses risk liability under gambling law if their
insurance policies are found to not serve a legitimate purpose of insurance,
but rather to be a disguise for illegal gambling. Meanwhile, fantasy sports
dispute resolution businesses run the risk of having their arbitration decisions challenged in federal court.
Recognizing all of these legal risks, it is no longer fair to view fantasy
sports as simply a “tongue-in-cheek exercise.”361 However, for the many
professional sports fans who wanted to experience a true simulation of the
professional sports marketplace, they now have it: legal risks and all.
361
Walker, supra note 5, at 1D.
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Copyright Termination and Loan-Out
Corporations: Reconciling Practice and Policy
by Aaron J. Moss1 and Kenneth Basin2 *
TABLE
OF
CONTENTS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II. COPYRIGHT TERMINATION UNDER THE 1976 COPYRIGHT
ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. A Brief History of Statutory Termination Rights . . . . . . . . .
B. Mechanics of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. The Special Role of the Work-for-Hire Doctrine in the
Termination Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Works for Hire Under the 1909 Act . . . . . . . . . . .
2. Works for Hire Under the 1976 Act . . . . . . . . . . .
a. Works for Hire Created By Employees . . . . . . . . . .
b. Works for Hire Created By Independent
Contractors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Works for Hire and Copyright Termination . . . . .
III. THE UNFORESEEN CHALLENGES OF LOAN -OUT
CORPORATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. What Is a Loan-Out Corporation? . . . . . . . . . . . . . . . . . . . .
B. Loan-Out Corporations in the Courtroom . . . . . . . . . . . . . . .
C. Loan-Out Corporations and Copyright Termination . . . . . . .
56
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1
Partner, Greenberg Glusker Fields Claman & Machtinger, LLP; J.D. magna cum
laude, Harvard Law School, 1997.
2
Associate, Greenberg Glusker Fields Claman & Machtinger, LLP; J.D. magna
cum laude, Harvard Law School, 2008; winner, Sears Prize, 2007.
* The authors would like to thank Dan Nabel, Bill Gable, Eugene Karlik, and
Katie Weiss for their valuable insights, contributions, and comments on early
drafts.
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D. Why Should We Care? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV. POTENTIAL WAYS TO RESCUE ARTISTS ’ TERMINATION RIGHTS
IN THE LOAN -OUT CONTEXT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Reading Reality Into the Copyright Act: Preserving
Termination Rights By Statutory Interpretation . . . . . . . . . .
B. Unraveling the Legal Fiction: Attacking the Work-for-Hire
Status of Loan-out Corporation Services . . . . . . . . . . . . . . . . .
1. Work-for-Hire Status of Loan-out Corporation
Services Under the 1909 Act. . . . . . . . . . . . . . . . . . .
2. Work-for-Hire Status of Loan-out Corporation
Services Under the 1976 Act. . . . . . . . . . . . . . . . . . .
3. Conclusion: Challenges to the Work-for-Hire
Status of Loan-out Corporation Services Will Be
Difficult . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V. BACK TO THE DRAWING BOARD : LEGISLATIVE REFORM AND
INDUSTRY BEST PRACTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Potential Revisions to the Copyright Act . . . . . . . . . . . . . . . .
B. Contractual Solutions to Legislative Problems . . . . . . . . . . . .
1. Alternative Organizational Forms . . . . . . . . . . . . . . .
2. Contractual Copyright Ownership Arrangements .
3. Contractual Reservation of Termination Rights . .
VI. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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I. INTRODUCTION
On January 1, 2013, the first generation of copyright transfers made
under the 1976 Copyright Act will become eligible for statutory termination, enabling creators of copyrighted properties and their heirs to unwind
their own transactions and reacquire potentially valuable rights to longsince transferred works. The implications for successful, enduring franchises
created after 1978 could be dramatic.3 For example, when rights to The
3
High-profile disputes over pre-1978 copyright transfers that are already subject to termination have already proven big news — and big business — in the
entertainment industry. In 2008, the heirs of Superman co-creator Jerome Siegel
famously recaptured a portion of the copyright to the iconic superhero. Siegel v.
Warner Bros. Entertainment Inc., 542 F. Supp. 2d 1098 (C.D. Cal. 2008). Similarly, shortly after media giant Disney announced its $4 billion acquisition of Marvel Entertainment, it received 45 notices of copyright termination from the heirs of
Jack Kirby, co-creator of many of Marvel’s most valuable franchises, including Spider-Man, X-Men, and the Fantastic Four. Brooks Barnes & Michael Cieply, A
Supersized Custody Battle Over Marvel Superheroes, N.Y. Times, Mar. 20, 2010, availa-
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Terminator film franchise went up for sale in December 2009, speculation
that James Cameron might eventually seek to recapture the copyright in the
franchise raged, and potentially depressed the franchise’s value at auction.4
More recently, in August 2011, the former lead singer of 1970s disco group
the Village People made headlines by serving notice on the publishing companies that manage the group’s catalog that he intended to recapture his
purported share of the copyright in the iconic hit “Y.M.C.A.”5
But many artists, writers, and other content creators who attempt to
recapture rights in previously transferred works may be in for a rude surprise. Artists who, for tax reasons, have utilized so-called “loan-out corporations” (entities by which artists “loan out” their own personal services to
employers) may find that they have unwittingly nullified their own copyright termination rights by rendering their creative efforts “works for hire,”
and therefore ineligible for termination.
This article examines, and seeks to reconcile, the conflict between the
widespread use of loan-out corporations in the entertainment industry and
the 1976 Copyright Act’s restriction on artists’ termination rights. Part II
reviews the background, policy rationale, and general legal structure of the
termination rights, as embodied in the Copyright Act. Part III offers a brief
summary of the history and rationale of loan-out corporations and explains
in greater detail the challenges they pose to statutory termination rights.
Part IV explores and critiques the legal arguments that lawyers and litigants
might use to invoke termination rights for artists who have relied on loanout corporations. Part V assesses options for legislative and contractual
amendments that would alleviate the conflict between loan-out corporations
and termination rights. Part VI concludes.
ble at http://www.nytimes.com/2010/03/21/business/21marvel.html; Michael
Cieply & Brooks Barnes, Disney Faces Rights Issues Over Marvel, N.Y. Times, Sept. 20,
2009, available at http://www.nytimes.com/2009/09/21/business/21marvel.html.
In July 2011, the Southern District of New York granted summary judgment in
Marvel’s favor, finding that the Kirby heirs’ termination notices were invalid because Kirby’s contributions had been works for hire. Marvel Worldwide, Inc. v.
Kirby, 756 F. Supp. 2d 461 (S.D.N.Y. 2011). An appeal is likely.
4
Matthew Garrahan, Puzzle Posed by Terminator Auction, Fin. Times, Dec. 11,
2009, available at http://www.ft.com/cms/s/0/86151482-e67f-11de-98b1-00144fe
ab49a.html.
5
Larry Rohter, A Village Person Tests the Copyright Law, N.Y. Times, Aug. 16,
2011, available at http://www.nytimes.com/2011/08/17/arts/music/village-peoplesinger-claims-rights-to-ymca.html.
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II. COPYRIGHT TERMINATION UNDER
THE
1976 COPYRIGHT ACT
A. A Brief History of Statutory Termination Rights
By passing the Copyright Act of 1976, Congress abandoned the unwieldy and procedurally unforgiving two-term system set forth in the previous 1909 Act, in favor of a unitary term of protection for new works created
on or after January 1, 1978. Under the prior Act, copyright protection
lasted for twenty-eight years from the date of first publication, plus an additional twenty-eight years upon a timely renewal, resulting in a maximum
protection of fifty-six years.6 If the copyright owner did not renew on time
(or neglected to clear various other procedural hurdles7), the work would fall
into the public domain.8
In theory, the 1909 Act’s renewal system was designed to benefit authors and their heirs, by giving those authors who sold their works for comparatively small sums the exclusive right to recapture the copyright for the
renewal term, thereby sharing in any long-term success of the work.9 In
practice, however, authors with little bargaining power were often required
to assign both the initial and renewal copyright terms to publishers in advance. The Supreme Court upheld this practice in Fred Fisher Music Co. v.
M. Witmark & Sons.10 As a result, Congress’s intent to confer the benefit of
the renewal term on authors and their heirs was, in the words of one Supreme Court justice, “substantially thwarted.”11
6
Act of March 4, 1909, ch. 320, 35. Stat. 1075, as amended and codified (hereinafter “1909 Act”) § 23.
7
Formal registration was required to secure federal copyright protection for unpublished works. 1909 Act § 12. For published works, publication without proper
statutory notice of copyright caused the work to automatically fall into the public
domain. Twin Books Corp. v. Walt Disney Co., 83 F.3d 1162, 1166 (9th Cir.
1996).
8
LaCienega Music Co. v. ZZ Top, 53 F.3d 950, 954 (9th Cir. 1995), superseded
by statute on other grounds, 17 U.S.C. § 303(b) (2006) (under 1909 Act, “[f]ailure to
renew a copyright after 28 years irrevocably injects the work at issue in the public
domain”).
9
H.R. Rep. No. 2222, at 14 (1909) (“It not infrequently happens that the author
sells his copyright outright to a publisher for a comparatively small sum. If the
work proves to be a great success and lives beyond the term of twenty-eight years,
your committee felt that it should be the exclusive right of the author to take the
renewal term.”).
10
318 U.S. 643 (1943).
11
Mills Music, Inc. v. Snyder, 469 U.S. 153, 185 (1985) (White, J., dissenting).
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The 1976 Copyright Act took effect on January 1, 1978. The 1976
Act replaced the two-term system with a single term for new works that
endured for the life of the author, plus fifty years.12 In the case of already
subsisting copyrights, the 1976 Act extended the second term of protection
by nineteen years, from twenty-eight to forty-seven years (the “Extended
Renewal Term”), thereby extending the total term of protection from fiftysix years to seventy-five years.13
Congress recognized that many authors and their heirs would have no
opportunity to share in the fruits of this Extended Renewal Term because
they had previously assigned away their copyright interests, including all
renewal term rights, in perpetuity.14 In order to allow these heirs to reap
the financial benefit of the additional nineteen-year term, the 1976 Act created a new right of termination, enabling authors and certain specified heirs
to recapture, for the Extended Renewal Term, rights in works that had previously been granted to third parties. The House Report accompanying the
1976 Act explained that “[a] provision of this sort is needed because of the
unequal bargaining position of authors, resulting in part from the impossibility of determining a work’s value until it has been exploited.”15
Of course, this was the same rationale that underpinned the decision to
give authors the benefit of the renewal term under the 1909 Act.16 In order
to prevent publishers from requiring authors to waive their termination
rights in advance, as they had with renewal rights, the termination provisions permit an author or his heirs to terminate a grant and any right under
it “notwithstanding any agreement to the contrary.”17 At the same time,
12
17 U.S.C. §302(a) (1994) (amended 1998). In 1998, Congress added an additional twenty years of protection. Works created on or after January 1, 1978 are
now protected for the life of the author plus seventy years. 17 U.S.C. § 302(a)
(2006). 17 U.S.C. §302(a) (1994) (amended 1998).
13
17 U.S.C. § 304(b); see H.R. Rep. No. 1476, at 135, 139–40 (1976); see also,
S. Rep. No. 94-473 at 117, 122 (1975). The duration of copyright for works created
prior to January 1, 1978 is now 95 years. 17 U.S.C. §§ 302(a), 303(a).
14
H.R. Rep. No. 1476, at 140–41; S. Rep. No. 94-473, at 123–24.
15
H.R. Rep. No. 1476, at 124.
16
See supra note 9.
17
17 U.S.C. § 203(a)(5) (grants executed on or after effective date of Act);
§ 304(c)(5) (grants executed before effective date of Act). In practice, courts have
suggested that, in some circumstances, parties may mutually agree to contract
around the termination right. See Milne v. Stephen Slesinger, Inc., 430 F.3d 1036
(9th Cir. 2005); Penguin Group (USA), Inc. v. Steinbeck, 537 F.3d 193 (2d Cir.
2008); Michael J. Bales, Note, The Grapes of Wrathful Heirs: Terminations of Transfers
of Copyright and “Agreements to the Contrary,” 27 Cardozo Arts & Ent. L.J. 663,
669 (2010).
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the termination statute was intended to reflect “a practical compromise that
[would] further the objectives of the copyright law while recognizing the
problems and legitimate needs of all interests involved.”18 Therefore, unlike
the previous renewal system, reversion through termination is not automatic
under the current Act. Termination may only be effected through affirmative action on the part of the author or his statutory successors, who must
serve an advance notice on the current copyright owner “within specified
time limits and under specified conditions.”19
B. Mechanics of Termination20
In general, termination is effected by serving an advance written notice
upon the grantee or the grantee’s successor in title, signed by all of those
entitled to terminate the grant,21 or by their duly authorized agents.22 The
notice must be served at least two years, but not more than ten years, before
the effective date of termination stated in the notice, and a copy of the
notice must be recorded in the Copyright Office before the effective date of
termination.23
For grants executed on or after January 1, 1978, Section 203 of the
Copyright Act applies. Section 203 gives authors and their statutory successors the right to terminate a qualifying grant any time during a five-year
period, which begins to run thirty-five years after the grant’s execution. If
the grant covers the right of publication, the period begins at the end of
18
H.R. Rep. No. 1476, supra note 14, at 124.
17 U.S.C. § 203(a)(4); H.R. Rep. No. 1476, at 124.
20
A detailed explanation of the mechanics of termination is 5 outside the scope
of this article and has been covered extensively elsewhere. Indeed, the passage of the
1976 Copyright Act was followed almost immediately by a flurry of scholarly
activity exploring the mechanisms governing these new rights. See, e.g., Melville B.
Nimmer, Termination of Transfers Under the Copyright Act of 1976, 125 U. Pa. L. Rev.
947 (1977); Marc. R. Stein, Termination of Transfers and Licenses Under the New
Copyright Act: Thorny Problems for the Copyright Bar, 24 UCLA L. Rev. 1141 (1977);
Benjamin Melniker & Harvey D. Melniker, Termination of Transfers and Licenses Under
the New Copyright Law, 22 N.Y.L. Sch. L. Rev. 589 (1976). See also Timothy K.
Armstrong, Shrinking the Commons: Termination of Copyright Licenses and Transfers for
the Benefit of the Public, 47 Harv. J. on Legis. 359 (2010); Anthony Cheng, Lex
Luthor Wins: How the Termination Right Threatens to Tear the Man of Steel in Two, 34
Colum. J.L. & Arts 261 (2011).
21
17 U.S.C. §§ 203(a)(1)–(2), 304(c)(1)–(2) (identifying heirs entitled to termination rights) (2006).
22
17 U.S.C. §§ 203(a)(4), 304(c)(4).
23
17 U.S.C. §§ 203(a)(4)(A), 304(c)(4)(A).
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thirty-five years from the date of publication, or at the end of forty years
from the date of execution of the grant, whichever ends first.24
For grants of renewal term interests executed before January 1, 1978,
Section 304(c) governs. Section 304(c) gives authors and their statutory successors the right to terminate the grant at any time during a five-year period
that begins on January 1, 1978, or fifty-six years after the date statutory
copyright was originally secured, whichever is later.25 Section 304(d), which
was added by Congress as part of the Sonny Bono Copyright Term Extension
Act of 1998 (which increased the term of all subsisting copyrights by
twenty years), provides a termination right for the extended twenty-year
period to authors or successors whose original termination rights, under Section 304(c), had, as of October 26, 1998, expired without being exercised.
Termination of the grants subject to Section 304(d) may be effected at any
time during a period of five years, beginning at the end of seventy-five years
from the date copyright was originally secured.26
Once termination is effected, the persons owning the termination interests (the author or his statutory successors) will own all rights provided
by the Copyright Act with respect to the work that was subject to the grant,
regardless of the particular termination statute that applies. There is, however, an important exception: any derivative works prepared under authority
of the grant before its termination may continue to be utilized after termination.27 This means, for example, that a screenwriter who has successfully
terminated his assignment to a motion picture studio of the right to make
films based on his or her screenplay may prevent the studio from making
new motion pictures based on the screenplay, but cannot prevent the studio
from exploiting any motion pictures created while the grant was in effect.
Grants executed prior to January 1, 1978 have been subject to termination for several decades, and the efforts to terminate such grants have been
the subject of several high profile Circuit Court opinions.28 The first generation of copyright transfers subject to Section 203 of the Copyright Act (i.e.,
24
“This alternative method of computation [was] intended to cover cases in
which years elapse between the signing of a publication contract and the eventual
publication of the work.” H.R. Rep. No. 1476, at 126.
25
17 U.S.C. § 304(c)(3).
26
17 U.S.C. § 304(d)(2).
27
17 U.S.C. §§ 203(b)(1), 304(c)(6)(A).
28
See, e.g., Milne v. Stephen Slesinger, Inc., 430 F.3d 1036 (9th Cir. 2005) (termination claim involving A.A. Milne’s Winnie the Pooh); Penguin Group (USA),
Inc. v. Steinbeck, 537 F.3d 193 (2d Cir. 2008) (termination claim brought by heirs
of novelist John Steinbeck); Classic Media, Inc. v. Winifred Knight Mewborn, 532
F.3d 978 (9th Cir. 2008) (termination claim involving rights to Lassie).
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all post-January 1, 1978 grants, which necessarily include all new works
created after the 1976 Act went into effect) will begin entering their termination windows on January 1, 2013.29 The period for providing notice of
termination of such grants has already opened. Over the next several years,
numerous grants in popular works are anticipated to become subject to
termination.30
C. The Special Role of the Work-for-Hire Doctrine in the Termination Analysis
The termination provisions apply to any “transfer” of copyright,31 including assignments, exclusive licenses,32 and nonexclusive licenses.33
While this covers a broad array of grants, the termination statutes expressly
29
This January 1, 2013 date is the date thirty-five years after the earliest possible date of execution of grants/transfers subject to the copyright termination mechanisms described in Section 203(a) of the Copyright Act. In practice, many grants of
books, screenplays, and other creative works include the right of publication, and
therefore will not be eligible for termination until thirty-five years have passed from
the date of publication, which will often be up to several years after the date the
grant was executed. 17 U.S.C. § 203(a)(3) (2006). In the event a work is not published within five years of the date the grant is executed, the grant may be terminated forty years from the date of execution. Id.at § 203(a)(3), 304(c)(4)(A).
30
See generally supra notes 4–6. See also Barnes & Cieply, supra note 3 (quoting
Stanford Professor Paul Goldstein as opining that “[a]ny young lawyer starting out
today could turn what [copyright termination specialist attorney Marc Toberoff is]
doing into a real profit center” because “[a] new wave of copyright termination
actions is expected to affect the film, music and book industries as more works reach
the 56-year threshold for ending older copyrights, or a shorter period for those
created under a law that took effect in 1978.”); Eriq Gardner, Copyright Battle Comes
Home, IP Law & Business, Law.com (Oct. 8, 2009), http://www.law.com/jsp/cc/
PubArticleCC.jsp?id=1202434372952.
31
17 U.S.C. §§ 203(a), 304(c) (2006).
32
A “transfer of copyright ownership” includes “an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a copyright
or of any of the exclusive rights comprised in a copyright, whether or not it is
limited in time or place of effect, but not including a nonexclusive license.” 17
U.S.C. § 101.
33
17 U.S.C. §§ 203(a), 304(c). See also Staff of H. Comm. On the Judiciary,
89th Cong. Rep. on Copyright Law Revision Part 6: Supplementary Rep. of
the Reg. of Copyrights on the General Revision of the U.S. Copyright Law
73 (H. Comm. Print 1965), (“Non-exclusive grants were included in the right on
the strength of the argument that, otherwise, there would be nothing to prevent a
transferee from avoiding the effect of the [termination] provision by compelling the
author to grant him a perpetual non-exclusive license along with a statutorily limited transfer of exclusive rights.”).
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provide that a grant in a “work made for hire” is not subject to statutory
termination under Section 203 or Section 304(c) of the Copyright Act. To
understand fully the importance of this exception, and its implications in
light of the manner in which most content in the entertainment industry is
created and transferred, it is necessary to first explore the nature of works
made for hire under both the 1909 and 1976 Copyright Acts.
1. Works for Hire Under the 1909 Act
The 1909 Copyright Act continues to govern works created prior to
January 1, 1978, and, by extension, works made for hire during that period.
The 1909 Act mentioned works for hire only in the definition section of the
statute, which provided that “[i]n the interpretation and construction of
this title . . . the word ‘author’ shall include an employer in the case of
works made for hire.”34 Neither the term “employer” nor “work for hire”
was defined by the 1909 Act, leaving courts to determine the contours of
the concept.
Throughout much of the life of the 1909 Act, courts applied the workfor-hire doctrine only to “traditional”35 hierarchical relationships in which
the employee created the work as part of “the regular course of business” of
the employer.36 During the last decade that the 1909 Act was in effect,
courts expanded the concept to include less traditional relationships, as long
as the work was made at the hiring party’s “instance and expense,”37 and the
hiring party had the right to “direct or supervise” the artist’s work.38
Even under this broader conception, however, when interpreting the
1909 Act, courts looked to the actual relationship between the hiring and
hired parties to determine whether a copyrighted work was created within
34
1909 Act at § 62.
Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 749 (1989).
36
Self-Realization Fellowship Church v. Ananda Church of Self-Realization, 206
F.3d 1322, 1327 (9th Cir. 2000) (quoting Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 5.03[B][1][a][i] (1999)).
37
See Lin-Brook Builders Hardware v. Gertler, 352 F.2d 298, 300 (9th Cir.
1965) (applying work for hire doctrine for where individual was commissioned to
produce a work as an independent contractor); Brattleboro Publ’g Co. v. Winmill
Publ’g Corp., 369 F.2d 565, 567–68 (2d Cir. 1966) (independent contractor is an
“employee” and a hiring party is an “employer” for purposes of the work-for-hire
statute if the work is prepared at the hiring party’s “instance and expense”).
38
See Donaldson Publ’g Co. v. Bregman, Vocco & Conn, Inc., 375 F.2d 639,
643 (2d Cir. 1967); Picture Music, Inc. v. Bourne, Inc., 457 F.2d 1213, 1216 (2d
Cir. 1972).
35
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the course of a true employment relationship. Where a putative employer
had no right to direct, supervise or control his “employee,” no employment
relationship existed, notwithstanding the parties’ use of the word “employment” in a contract governing the relationship.39 Likewise, a putative employee’s dominant role in the corporation, his freedom to engage in
profitable outside activities without sharing the proceeds with the “employer,” and the absence of any fixed salary weighed against a finding that
the hired party was a true employee.40
The clearest application of this principle can be found in the Second
Circuit’s opinion in Marvel Characters, Inc. v. Simon.41 In Marvel Characters,
comic book writer and artist Joe Simon sought to terminate his transfer (to
the predecessors-in-interest of Marvel Comics) of the copyrights for the
iconic Captain America character and his earliest adventures.42 However, in
a 1969 settlement agreement to an earlier dispute between the parties, Simon acknowledged that his contribution to the Captain America character
and comics “was done as an employee for hire of [Marvel’s predecessor].”43
Relying on that acknowledgment, Marvel filed for a declaratory judgment
that Simon’s termination notices were invalid, and the Southern District of
New York granted summary judgment in Marvel’s favor.44 The lower court
determined that, based on the language in the 1969 settlement agreement,
the Captain America copyrights fell within the work-for-hire exception to
copyright termination under Section 304(c) of the Copyright Act.45 The
Second Circuit reversed, holding that “an agreement made after a work’s
creation stipulating that the work was created as a work for hire constitutes
an ‘agreement to the contrary’ which can be disavowed pursuant to the statute.”46 The court noted that, in assessing work-for-hire status, “[i]t is the
relationship that in fact exists between the parties, and not their description
of that relationship, that is determinative.”47 The Second Circuit therefore
remanded to the lower court for trial on the issue of whether the Captain
America stories were, in fact, created as works for hire (and therefore
39
Donaldson, 375 F.2d at 641–43.
Id.
41
310 F.3d 280, 291 (2d Cir. 2002) (quoting Melville B. Nimmer & David
Nimmer, § 11.02[A][2] (2000 ed.)).
42
Id. at 282–84.
43
Id. at 284.
44
Id. at 285.
45
Id. at 284–85.
46
Id. at 290.
47
Id. (quoting Nimmer & Nimmer, supra note 41, § 11.02[A][2]).
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whether Simon had the right to terminate).48 The Second Circuit’s ruling
and rationale in Marvel Characters remains one of the most comprehensive
and widely adopted statements of the law governing contractual agreements
and works for hire under the 1909 Act. Simply stated, parties may not
engage in an after-the-fact characterization in order to avoid the prospect of
statutory termination.
2. Works for Hire Under the 1976 Act
Unlike the previous 1909 Act, the 1976 Copyright Act, which governs
works created on or after January 1, 1978, explicitly defines “work made for
hire.” To qualify as a work made for hire under the 1976 Act, the work
must either be: (1) “prepared by an employee within the scope of his or her
employment,” or (2) be one of certain enumerated works that are specially
ordered or commissioned, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for
hire.49
a. Works for Hire Created By Employees
If a hired party is determined to be an employee, the copyright in a
work created within the course and scope of the employment relationship
48
49
Id. at 293.
The full definition of a “work made for hire” under the 1976 Copyright Act
is:
(1) a work prepared by an employee within the scope of his or her employment; or
(2) a work specially ordered or commissioned for use as a contribution to a
collective work, as a part of a motion picture or other audiovisual work, as
a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the
parties expressly agree in a written instrument signed by them that the
work shall be considered a work made for hire. For the purpose of the
foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose
of introducing, concluding, illustrating, explaining, revising, commenting
upon, or assisting in the use of the other work, such as forewords,
afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes,
and indexes, and an “instructional text” is a literary, pictorial, or graphic
work prepared for publication and with the purpose of use in systematic
instructional activities.
17 U.S.C. § 101 (2006).
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will be considered a work made for hire.50 Like the 1909 Act, the 1976 Act
did not define the term “employee.” In Community for Creative Non-Violence
v. Reid, however, the Supreme Court unanimously ruled that Congress intended to invoke common law agency principles to determine whether the
hired party is an “employee” for purposes of the Copyright Act.51 The
Court’s inquiry in Reid focused on the hiring party’s right to control the
“manner and means” by which the copyrighted work was accomplished.52
Under the Court’s test, for the hired party to be considered an “employee,”
the hiring party must have control over the process by which the product was
created. The right to control the work product is not solely determinative of
employment.53
To aid its inquiry into employment status, the Court enumerated an
illustrative list of factors, including: (1) the skill required; (2) the source of
the instrumentalities and tools; (3) the location of the work; (4) the duration
of the relationship between the parties; (5) whether the hiring party has the
right to assign additional projects to the hired party; (6) the extent of the
hired party’s discretion over when, and for how long, to work; (7) the
method of payment; (8) the hired party’s role in hiring and paying assistants; (9) whether the work is part of the regular business of the hiring party;
(10) whether the hiring party is in business; (11) the provision of employee
benefits; and (12) the tax treatment of the hired party.54
While the Supreme Court in Reid counseled that “[n]o one of these
factors is determinative,”55 subsequent cases have accorded certain factors
greater weight than others.56 Indeed, in Aymes v. Bonelli, the Second Circuit
50
Id.
490 U.S. 730, 751 (1989).
52
Reid, 490 U.S. at 751.
53
Id. at 741.
54
Id. at 751–52.
55
Id. at 752.
56
See, e.g., Langman Fabrics v. Graff Californiawear, Inc., 160 F.3d 106, 110–11
(2d Cir. 1998) (“Not all the Reid factors will be significant in every case, and we
must weigh in the balance only those factors that are actually indicative of agency in
the particular circumstances before us.”); Marco v. Accent Publ’g Co., 969 F.2d
1547 (3d Cir. 1992) (holding that photographer was an independent contractor
while ignoring some Reid factors and noting that some were “indeterminate” and
should not be considered); MacLean Assocs., Inc. v. Wm. M. Mercer-MeidingerHansen, Inc., 952 F.2d 769 (3d Cir. 1991) (holding that a computer programmer
could be an independent contractor without addressing several of Reid factors);
M.G.B. Homes, Inc. v. Ameron Homes, Inc., 903 F.2d 1486 (11th Cir. 1990)
(holding that a drafting service operated as an independent contractor to a builder
based on only eight factors, ignoring others).
51
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67
accorded particular weight to five out of twelve factors: “(1) the hiring
party’s right to control the manner and means of creation; (2) the skill required; (3) the provision of employee benefits; (4) the tax treatment of the
hired party; and (5) whether the hiring party has the right to assign additional projects to the hired party.”57 Of those, the Aymes court suggested
that consideration of only two of the factors — employee benefits and the
tax classification of the hired party — would be “highly indicative” of
whether a hired party should be considered an employee or, conversely, an
independent contractor.58 Later cases have avoided narrowing the list of relevant factors as far as the Aymes court did, but have validated the focus, at
least in the copyright context, on the five factors initially enumerated in
Aymes.59
b. Works for Hire Created By Independent Contractors
If the hired party is determined to be an independent contractor, the
work will only be considered a work made for hire if it falls within one of
the categories of qualifying “specially ordered or commissioned” works set
forth in Section 101 of the Copyright Act.60 Even then, the parties must
agree, in a writing signed by both parties, that the work shall be considered
a “work made for hire.”61 Courts have generally refused to require that any
specific words be used in such a writing (not even the term “work for hire”
need appear), although it must appear from the document that the parties
57
980 F.2d 857, 861 (2d Cir. 1992).
Id. at 862–63.
59
See, e.g., Martha Graham Sch. & Dance Found. v. Martha Graham Ctr. of Contemporary Dance, Inc., 380 F.3d 624, 636 n.21 (2d Cir. 2004); Langman Fabrics,
160 F.3d at 110–11; Price v. Fox Entm’t Group, Inc., 473 F. Supp. 2d 446, 456
(S.D.N.Y. 2007) (referring to the list of five factors highlighted by Aymes as the
“ Reid-Aymes factors”); Cf. Eisenberg v. Advance Relocation & Storage, Inc., 237
F.3d 111, 115–16 (2d Cir. 2000) (declining to adopt Aymes court’s weighing of Reid
factors in assessing employee status for purposes of Title VII discrimination claim).
60
17 U.S.C. § 101 (2006). Of primary importance to the entertainment industry, Section 101 identifies works that are commissioned “as a part of a motion
picture or other audiovisual work” — which would encompass contributions from
screenwriters, directors, cinematographers, composers, actors, or virtually anyone
else involved in the production of a motion picture — as eligible for work-for-hire
status.
61
Id.; May v. Morganelli-Heumann & Assocs., 618 F.2d 1363, 1368–69 (9th
Cir. 1980).
58
68
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both intended that the work be considered a work for hire.62 So long as this
intent exists prior to the work’s creation, many courts have held that the
writing evidencing this agreement may be executed after the work is
created.63
If the work does not fall within one of the enumerated categories set
forth in Section 101, however, it will not qualify as a work for hire unless
the hired party was an employee of the hiring party.64 Two notable examples of non-qualifying works are photographs65 and sound recordings.66 Unless they qualify as “contributions to a collective work” (or, perhaps, if they
can be pigeonholed into another category in the statute’s enumerated list67),
such works created by independent contractors would not qualify as works
for hire, notwithstanding any agreement between the hiring party and the
commissioned party purporting to treat them as such.
62
Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1141 (9th Cir.
2003).
63
Playboy Enters., Inc. v. Dumas, 53 F.3d 549, 559 (2d Cir. 1995) (while parties cannot retroactively agree to render a work a work for hire, they may create the
written memorialization of such an agreement after the fact); Compaq Computer
Corp. v. Ergonome Inc., 210 F. Supp. 2d 839 (S.D. Tex. 2001) (noting that “[t]he
Fifth Circuit has deemed the Second Circuit to be ‘the de facto Copyright Court of
the United States’” and following Playboy Enters., Inc. v. Dumas) (quoting Easter Seal
Soc. for Crippled Children and Adults of La., Inc. v. Playboy Enter., 815 F.2d 323,
325 (5th Cir. 1987)). But see Schiller & Schmidt v. Nordisco Corp., 969 F.2d 410,
412–13 (7th Cir. 1992) (holding the opposite).
64
Reid, 490 U.S. at 741 (“Section 101 plainly creates two distinct ways in which
a work can be deemed for hire: one for works prepared by employees, the other for
those specially ordered or commissioned works, which fall within one of the nine
enumerated categories and are the subject of a written agreement.”).
65
SHL Imaging, Inc. v. Artisan House, Inc., 117 F. Supp. 2d 301, 312
(S.D.N.Y. 2000) (“[P]hotographs are not included in the § 101 list of subject matters permitting a work-for-hire agreement with independent contractors.”); R. Scott
Miller, Jr., Photography and the Work-for-Hire Doctrine, 1 Tex. Wesleyan L. Rev. 81,
103102 (1994).
66
For a more detailed discussion, see, e.g., Mary LaFrance, Authorship and Termination Rights in Sound Recordings, 75 S. Cal. L. Rev. 375, 378–90 (2002). The
serious practical consequences of this exclusion, as it relates to copyright termination in particular, has also been the subject of analysis and discussion. See David
Nimmer & Peter S. Menell, Sound Recordings, Works for Hire, and the Termination-ofTransfers Time Bomb, 49 J. Copyright Soc’y U.S.A. 387 (2001).
67
See SHL Imaging, Inc., 117 F. Supp. 2d at 312.
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3. Works for Hire and Copyright Termination
The House Report to the 1976 Act expressly notes that one of the
principal reasons the definition of the term “works made for hire” assumed
importance in the Act’s development was because the right of termination
would not apply to such works.68 This decision was one of the primary
means by which Congress sought to strike an appropriate balance between
the rights of artists and producers/employers. Congress evidently reasoned
that the employers or commissioning entities of genuine works for hire (presumably) had meaningfully contributed resources and/or facilities towards
the works’ creation, and were therefore entitled to reap the benefits of that
investment for the full life of the resulting copyrights. In contrast, such
protection would not be afforded to entities that merely acquired creative
works that had been generated through the efforts and investment of artists
working without their support.
The interminable status of works for hire also follows from the 1976
Act’s explicit recognition that copyright vests initially in the author or authors who created the work.69 In the case of works for hire, however, the
employer or person for whom the work was prepared, not the individual
who created the work, is considered the author from inception.70 Because
only authors and their specified heirs may terminate copyright transfers, the
legal fiction of the work-for-hire doctrine ensures that neither the actual
creator of the work nor his heirs will ever possess termination rights.
The practical consequences of a work’s characterization thus become
clear: if a writer assigns his or her post-January 1, 1978 copyright in a
screenplay to a studio, he or she may terminate this grant as early as thirtyfive years later. If, on the other hand, the screenwriter is determined to be
an “employee” of the studio, or if the studio has commissioned the writer to
prepare the screenplay on its behalf, the studio is deemed to be the author of
a screenplay as a work made for hire, and the statutory termination provisions will never apply. Work-for-hire agreements are extremely common in
the entertainment industry,71 and the many works created by studio em68
H.R. Rep. No. 94-1476, at 125 (1976).
17 U.S.C. § 201(a) (2006).
70
17 U.S.C. § 201(b).
71
See generally Genevieve Jolliffe & Chris Jones, The Guerilla Film
Maker’s Handbook 123 (2004) (advising filmmakers to “have work-for-hire agreements with anyone on your crew that makes a creative contribution that could be
copyrightable”); Harvey Rachlin, The TV and Movie Business: An Encyclopedia of Careers, Technologies, and Practices 332 (1991) (explaining significance of work-for-hire contractual arrangements in the entertainment industry);
69
70
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ployees in the scope of their employment, or by specially commissioned
screenwriters, will never be subject to statutory termination.
This loss of termination rights seemingly should not come into play
with respect to preexisting works of freelance writers, directors and other
artists created prior to entering into a relationship with a studio or production company. While studios will often attempt to characterize such preexisting works as having been made for hire,72 the absence of an agreement
made contemporaneously with the work is likely to defeat the studio’s characterization should a dispute arise. Perhaps recognizing this fact, studios
routinely insert “belt and suspenders” language in their contracts with
screenwriters, providing that if the work being acquired is for any reason not
deemed to be a work for hire, the writer will also convey his rights in the
work via an assignment.73 Such assignment language does ensure, at least
initially, that the studio becomes the owner of all preexisting works upon
which a hit film is based. Unlike a work made for hire, however, a mere
assignment will be subject to statutory termination. This means that while
a studio may own the copyright in perpetuity for a film or other derivative
work based on a preexisting screenplay, the writer could retain the ability to
terminate rights in the screenplay itself, or at the very least, in whatever
underlying notes or materials the writer had already prepared before comRandall D. Wixen, The Plain and Simple Guide to Music Publishing 23 (2005)
(noting that, in the world of music, “[w]ork-for-hire agreements are most common
in film and television composing, where the studio wants to own and control the
whole collaborative result and not have to keep checking with the owners of the
incorporated elements”).
72
See Michael H. Davis, The Screenwriter’s Indestructible Right to Terminate Her Assignment of Copyright: Once a Story is “Pitched,” a Studio Can Never Obtain All Copyrights
in the Story, 18 Cardozo Arts & Ent. L.J. 93, 114 (2000).
73
See id. See also Alexander Lindey, Lindey on Entertainment, Publ. & the
Arts § 6:33 (3d ed. 2009) (“All material written under this agreement (the ‘Material’)
constitutes work that is a contribution to a motion picture or other audio visual
work under this agreement, and accordingly shall be deemed to be a work made for
hire for Producer. Producer shall be considered the author of the Material for all
purposes and the sole and exclusive owner of all copyrights, patents, trademarks,
and all other right, title, and interest in and to the Material and each and every part
of it, including all incidents, plots, dialogue, characters, action, and titles forming a
part of the Material. Writer will, upon request, execute, acknowledge, and deliver
to Producer such additional documents as Producer may deem necessary to effectuate Producer’s rights under this agreement, and Writer hereby grants to Producer
the right, as its attorney-in-fact, to execute, acknowledge, deliver, and record in the
U.S. Copyright office or elsewhere any and all such documents. In the event that
the work is deemed to not be a work made for hire, writer hereby assigns all right,
title, and interest in and to said work to Producer.”) (writing services agreement).
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71
mitting his or her ideas to a more fully fleshed-out form.74 Upon recapturing these rights, the writer or his heirs would have the exclusive right to
create new films and other derivative works based on the screenplay or underlying materials.75
However, many artists could nevertheless be unwittingly deprived of
their valuable termination rights, by creating their works while nominally
employed by their own single-employee loan-out corporations. As discussed
in greater detail below, the 1976 Copyright Act’s copyright termination
provisions create an interesting irony: the law prevents studios or producers
from using draconian agreements to divest artists of their valuable termination rights. Yet many artists may inadvertently suffer the same fate at their
own hands, simply by using a corporate structure created by, for, and with
the sole purpose of benefitting the artist.
III. THE UNFORESEEN CHALLENGES
OF
LOAN -OUT CORPORATIONS
In principle, copyright termination rights should function in a
straightforward manner. The mechanics of copyright termination are
74
See Davis, supra note 72, at 109 (“[S]creenwriters who show up at the producer’s office with preexisting work — whether it be a pitch written on note cards,
an outline, or a treatment — can certainly produce a future work as a specially
commissioned work that will not be subject to a termination right as a work for
hire. However, the pitch, outline, or treatment itself will never be a work for hire,
and will always be subject to the author’s termination right.”).
75
A “mutual block” scenario could arise, depending on how closely the eventual
production, based on the screenwriter’s original concept or screenplay, actually resembled the underlying materials:
[I]n theory, any number of spinoffs, sequels, or character developments are
possible. This is because although the derivative work is safe from the
author’s termination rights, to the extent that the underlying preexisting
work was well-developed and to the extent that the derivative work is
truly based upon the underlying work, the author, having regained copyright in that work, has the right to create, or license others to create, new
derivative works based on the original work. On the other hand, there
will no doubt be severe, perhaps even fatal, limits upon the author’s freedom to exploit the underlying work to the extent that the prepared derivative work(s) adopted new character names, a new title, and, especially, to
the extent new matter was added. A canny producer might succeed in
limiting the author’s freedom by creating during the rewrite process
names, titles, and other matter to which public recognition attaches. Such
new expressive features, created within the work-for-hire relationship, become parts of the specially commissioned work for hire.
Id. at 98–99.
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spelled out clearly by the Copyright Act itself, while the work-for-hire doctrine, a commonly used and understood concept in the entertainment industry and a well-entrenched and widely litigated legal doctrine, serves to limit
the scope of copyrighted works and transfers that are eligible for termination. Yet few people seem to realize that this seemingly simple scheme has
been complicated dramatically, and perhaps even undermined altogether, by
artists’ widespread use of so-called “loan-out corporations.”
A. What Is a Loan-Out Corporation?
A loan-out corporation is a legal fiction employed for the financial benefit of successful artists and entertainers. It is a duly organized corporation,
typically wholly owned by an artist, the sole function of which is to “loan
out” the services of the artist-owner to producers and other potential employers.76 Loan-out arrangements typically involve two primary contractual
relationships: (1) an agreement between the artist and his wholly owned
corporation by which the artist agrees to provide services to that corporation, often exclusively, in exchange for a fixed or contingent salary; and (2)
an agreement between the loan-out corporation and a producer or other employer to furnish the artist’s services to said producer for a given project.77
Loan-out corporations offer two primary benefits to the artists who use
them: limited personal liability and beneficial tax treatment. By contracting through a separately organized corporation, artists are able to limit
their liability to the corporation’s assets, and avoid personal liability that
might otherwise arise out of the corporation’s dealings. Despite the fact
that an artist and his loan-out corporation are effectively one and the same,
the distinction is nevertheless meaningful. In one widely publicized case,
actress Kim Basinger successfully appealed an $8 million breach of contract
judgment against her because the court had relied on a special verdict find-
76
For more detailed descriptions of the nature and function of loan-out corporations, see, e.g., George G. Short, The Loan-Out Corporation in Tax Planning for Entertainers, 44 Law & Contemp. Probs. 51, 51 (1981); Marilyn Barrett, Independent
Contractor/Employee Classification in the Entertainment Industry: The Old, the New and the
Continuing Uncertainty, 13 U. Miami Ent. & Sports L. Rev. 91, 108 (1995); Mary
LaFrance, The Separate Tax Status of Loan-Out Corporations, 48 Vand. L. Rev. 879,
880–83 (1995); Robert A. Cohen, To Incorporate or Not to Incorporate? That Is the
Question, 2 Tex. Rev. Ent. & Sports L. 113, 114 (2001).
77
Short, supra note 76, at 51.
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73
ing that Basinger “and/or” her loan-out corporation were liable for the
breach (as opposed to a specific finding as to Basinger individually).78
More fortunate artists will never have to avail themselves of such limited liability, but can nevertheless achieve significant tax savings by using
loan-out corporations. Artists who pass their income through loan-out corporations may enjoy better liquidity/cash flow, can coordinate their income
distribution by fiscal year, enjoy lower corporate tax rates, and can further
shield themselves from taxes by using qualified pension, profit-sharing, and
employer medical reimbursement plans.79 The Internal Revenue Service,
however, is well aware of the tax-shielding properties of loan-out corporations. Indeed, it has engaged in a decades-long game of cat-and-mouse with
artists (and their tax attorneys), revising the tax code and periodically stepping up tax enforcement efforts in an effort to reclaim much of the revenue
that loan-out corporations have allowed artists to retain.80
B. Loan-Out Corporations in the Courtroom
Loan-out corporations and the legal battles they create date back at
least as far as the 1930s. In 1938, Fontaine Fox, a prominent and celebrated
cartoonist of the era, clashed with the IRS, which had disregarded his loanout corporation as a mere dummy and claimed that Fox’s income had been
improperly assigned to the corporation.81 Fox ultimately prevailed before
the Board of Tax Appeals, the predecessor to today’s U.S. Tax Courts.82 The
next year, stage and film actor/screenwriter/producer/director Charles
Laughton successfully fended off a similar IRS challenge to his use of a loanout corporation.83 Over the years that followed these early cases, the IRS
78
Main Line Pictures, Inc. v. Basinger, No. B077509, 1994 WL 814244, at *1
(Cal. Ct. App. 1994). The lessons learned by the industry from this case, however,
may have substantially undermined the limited liability benefits of loan-out corporations in the long run: savvy studios and producers now routinely demand the
artists personally guarantee the obligations of their loan-out corporations.
79
Short, supra note 76, at 52–65; LaFrance, supra note 76, at 883–904; Cohen,
supra note 76, at 118–26.
80
Daniel Sandler, The Taxation of International Entertainers and
Athletes: All the World’s a Stage 158–61 (1995); Kathryn Michaelis, IRS Tightens Grip on Hollywood Deductions, 6 DePaul-LCA J. Art & Ent. L. 178, 178 (1995);
Schuyler M. Moore, Taxation of the Entertainment Industry 115–16 (9th
ed. 2008); Short, supra note 76, at 65–74; Barrett, supra note 76, at 8–14; LaFrance,
supra note 76, at 904–54; Cohen, supra note 76, at 127–32.
81
Fox v. Comm’r, 37 B.T.A. 271 (1938).
82
Id.
83
Laughton v. Comm’r, 40 B.T.A. 101 (1939).
74
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and the courts have remained at odds with respect to the legitimacy of the
loan-out corporations (and the associated beneficial tax treatment enjoyed by
those who use them).
The IRS first successfully attacked loan-out corporations in Sargent v.
Commissioner, 93 T.C. 572 (1989), a case in which the Service challenged the
use of loan-out corporations by two hockey players for the National Hockey
League’s Minnesota North Stars. North Stars players Gary Sargent and
Steven Christoff had contracted with their club via “personal services corporations” (or “PSCs”). Applying the common law definition of “employer
and employee”, the U.S. Tax Court found that the players were not truly
employees of their PSCs, but of the club itself, which (through the team’s
coach) controlled the players’ on-ice services; as a result, the Tax Court disallowed deductions taken by the players for pension plan contributions.84
The IRS’s victory, however, was short-lived. The Eighth Circuit reversed, holding that, for a loan-out corporation to be deemed a true controller of the service-providing individual: (1) the service provider must be “an
employee of the loan-out corporation, whom the corporation has the right to
direct or control in some meaningful sense” and (2) there must exist between the loan-out corporation and the service recipient “a contract or similar indicia recognizing the loan-out corporation’s controlling position.”85
The court went on to uphold the legitimacy of the hockey players’ loan-out
arrangements, and the bona fide status of the players as employees of their
respective PSCs. Among other things, it relied on the bona fide contracts
between the players and their PSCs and the PSCs and the North Stars club,
as well as the recognition accorded to the arrangement by the club, the
NHL, and the Minnesota Office of Administrative Hearings.86 The IRS,
however, was undeterred, stating in a 1991 Action on Decision that, in
other circuits, it would not follow the Eighth Circuit’s holding in Sargent.
In doing so, the IRS signaled that it intended to continue to aggressively
pursue taxes from loan-out arrangements like that in Sargent.87
84
Sargent v. Comm’r, 93 T.C. 572 (1989).
Sargent v. Comm’r, 929 F.2d 1252, 1256 (8th Cir. 1991).
86
Id. at 1260. Not everyone was as convinced. In a dissenting opinion, the
Eighth Circuit’s Judge Arnold observed, “The idea that the coach issued orders to
Sargent and Christoff in their capacity as corporate officers, which orders they then
relayed to themselves as corporate employees, is fanciful.” Id. at 1261 (Arnold, J.,
dissenting).
87
Sargent v. Comm’r, 929 F.2d 1252, 1256 (8th Cir. 1991), action on dec., CC1991-022 (Oct. 22, 1991); Marilyn Barrett, Loan-Out Corporations, CEB California
Cal. Bus. Law Reporter 125, 125–28. (1995).
85
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75
The IRS made good on that promise a few years later, bringing an
action against Houston Rockets guard Allen Leavell for taxes from revenues
paid by the club to his loan-out corporation.88 Acknowledging the Eighth
Circuit’s previous decision in Sargent, the Tax Court dismissed that court’s
reasoning as being too focused on the contracts presented by the players,
noting,
[w]hile we agree that contract terms are important in determining
whether a personal service corporation is to be recognized as the true employer of the individual service provider, we do not believe that the mere
existence of such terms in a contract is sufficient when the reality of the
relationship is otherwise.89
Considering Leavell’s personal guarantee of the contract between his loanout and the Rockets club, as well as the authority of both the Rockets and
the National Basketball Association to directly control Leavell’s services (by,
for example, taking disciplinary action, such as leveling fines and suspensions), the Tax Court concluded that Leavell was an employee of the Houston Rockets, and the income paid to his loan-out should be imputed to him
personally.90
Outside of the world of the U.S. Tax Courts, however, judges have
shown much greater inclination to respect loan-out arrangements. For example, the Ninth Circuit has gone so far as to hold that a doctor was an
employee of his own loan-out corporation even where “[t]here is no documentary evidence in the record demonstrating that [the doctor] is an employee of [his loan-out] or that [the loan-out] has the right to control the
activities of [the doctor].”91
Yet despite the ever-present risk of scrutiny from tax authorities, in the
more than seventy years since Fontaine Fox and Charles Laughton first tangled with the IRS, loan-out corporations have achieved near-ubiquity in the
entertainment industry: they have been broadly adopted by talent in multiple fields and are even a regular topic in mass-market entry-level texts about
the industry.92
88
Leavell v. Comm’r, 104 T.C. 140 (1995).
Id. at 154.
90
Id. at 157–59.
91
Idaho Ambucare Cent. Inc. v. United States, 57 F.3d 752, 755 (9th Cir.
1995).
92
See generally Richard Schulenberg, Legal Aspects of the Music Industry: An Insider’s View 338–41 (Robert Nirkind et al. eds., 1999); Dina Appleton
& Daniel Yankelevits, Hollywood Dealmaking: Negotiating Talent
89
76
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C. Loan-Out Corporations and Copyright Termination
Typically, the agreement between an artist and his loan-out corporation provides that the results and proceeds of the artist’s services are “works
made for hire” for the corporation, and are therefore owned by the loan-out
corporation. For example, an employment agreement between artist and
loan-out may provide:
(b) Artist hereby grants, transfers and assigns to Corporation, and Corporation shall be entitled to and shall own solely and exclusively, forever, without limitation and for all purposes, each, every and all rights and interests
of any and every kind and character whatsoever in and to all of the results
and proceeds of Artist’s services hereunder. . . .
(e) To the extent that the work is considered: (i) contributions to collective
works and/or (ii) as parts or components of audio-visual words [sic], the
parties hereby expressly agree that the work shall be considered ‘works
made for hire’ under the United States Copyright Action [sic] of 1976, as
amended (17 U.S.C. § 101 et seq.). In accordance therewith, the sole right
of copyright in and to the work shall be the sole and exclusive property of
Corporation in perpetuity. To the extent that the work is deemed works
other than contributions to collective works and/or parts or components of
audio-visual works, Artist hereby assigns to Corporation all rights, title
and interest in and to the copyrights of such work and all renewals and
extensions of the copyrights that may be secured under the laws now or
hereafter in force and effect in the United States of America or any other
country or countries. Artist shall execute, verify, acknowledge, deliver and
file any and all formal assignments, recordation and any and all other documents which Corporation may prepare and reasonably call for to give
effect to the provisions of this Agreement.93
There are two primary reasons why artists choose to deem the results and
proceeds of their work a “work made for hire” for their loan-out corporation. First, a producer who enters into an agreement with an artist’s loanout corporation looks to the corporation for the same broad grant of rights
the producer would otherwise seek from the artist directly. Consequently,
Agreements 125 (2002); Gail Resnik & Scott Trost, All You Need to
Know About the Movie and T.V. Business 200–01 (1996).
93
Cohen, supra note 76, at 142–44 (rights language drawn from sample “Employee Loan-out Agreement” prepared by practicing California attorney). Note that
this language first assigns all results and proceeds, then specifies that, to the extent
possible, the results and proceeds shall be considered “works made for hire,” and
then again assigns all results and proceeds not captured within the “work made for
hire” designation. While such language is, strictly speaking, redundant, such a
“belt and suspenders” approach is typical of contractual rights language employed
in the entertainment industry.
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77
the loan-out corporation must acquire all rights to the artist’s services in
order to convey them to the producer. Second, in order to avoid a challenge
by the IRS on the basis that the loan-out corporation is a mere sham, the
artist’s employment agreement with the corporation must involve a facially
legitimate exchange of rights and services for appropriate compensation.
Notably, not all such agreements necessarily rely expressly on the
“work made for hire” approach. For example, one prominent treatise offers
a form that relies solely on assignment language without express reference to
the work-for-hire doctrine.94 Even in the absence of express work-for-hire
language, however, the employee-employer relationship between an artist
and his or her loan-out corporation would still likely give rise to an inference that the results and proceeds of the artist-employee’s services are a
“work made for hire” for the corporation.95 For example, in the only published case to address the subject, the Second Circuit held that several ballets
choreographed by well-known dancer-choreographer Martha Graham while
Graham was affiliated with her own Center were, in fact “works made for
hire” (under both the 1909 and 1976 Copyright Acts) and were therefore
owned by the Center.96
Ironically, however, the very rights arrangement by which artists make
their loan-out corporations effective and legitimate also potentially destroys
94
See Donald C. Farber & Peter A. Cross, Entertainment Industry
Contracts, Form 7-1, ¶ 11 (2009) (“Employee hereby grants, transfers and sets
over to Corporation, and Corporation shall be entitled to and shall own solely and
exclusively, forever and without limitation and for all purposes, each and every and
all rights and interests of any and every kind and character whatsoever in and to all
of the results and proceeds of Employee’s services hereunder.”). Notably, however,
the commentary to this form observes that “[w]hen such clauses are included in
lending agreements with production companies, the purpose of the provision is to
ensure that the production company obtains all the fruits of the employee’s labors
for which it is paying” and that “the grant of rights by the employee to loan-out
corporation must encompass all rights which the production company may require,” and suggests that the results and proceeds of the artist’s services under the
loan-out agreement represent a work made for hire. Id. at Form 7-1, Comment to ¶
11, n.4 (citing to Nimmer’s discussion of works made for hire).
95
See infra Part IV.B.2.
96
Martha Graham Sch. & Dance Found., Inc. v. Martha Graham Ctr. of Contemporary Dance, Inc., 380 F.3d 624, 639–42 (2d Cir. 2004). The court’s decision
was based, in large part, on a detailed analysis of the precise agreement between
Graham and the Center — for instance, the court found that works created during
an earlier period when Graham’s contractual obligations to the Center were less
intensive were not works for hire, in part because the contract in effect at that time
made no reference to choreography as being within the scope of Graham’s duties.
Id. at 637–39.
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their copyright termination rights. This is because, under Section 203(a) of
the Copyright Act, as works made for hire, the works created by artists for
their loan-out corporations are apparently rendered ineligible for copyright
termination.97 As Mary LaFrance explains, regarding the recording
industry:
[M]any of the performers who have made the greatest contributions
to sound recordings may already have forfeited their termination rights in
those recordings. Those recording artists who render their services
through loan-out corporations are in fact employees of those corporations,
and any performances they render in that capacity are already works made
for hire. When the loan-out corporation contracts with a record label to
“lend” the performer’s exclusive services in carrying out the recording
contract, the artist is creating a work made for hire as an employee of the
loan-out, which is, therefore, the author of the artist’s contribution to the
recording. The loan-out assigns its copyright interest to the record label,
although it remains the author. Because the recording is already a “work
made for hire” under the “employee” prong of the [Copyright Act Section] 101 definition, however, the recording artist’s contribution to the
work is now completely ineligible for termination rights, which do not
apply to any works created as works made for hire. Thus, when an artist
performs on a sound recording as a loan-out employee, neither the artist
nor his or her loan-out corporation has any termination rights in that
recording.98
The few commentators who have addressed this question, although declining to delve deeply into the underlying legal issues, have reached conflicting
conclusions. Citing the Martha Graham case, Daniel Gould agrees with
Mary LaFrance in concluding that artists who use loan-out corporations
“cannot regain their works under § 203, solely because of the presence of an
intermediary party, even though that party is a corporation of which they
are sole owner.”99 At least one other commentator, Michael H. Davis, is
97
See supra Section II.C.1.
LaFrance, supra note 66, at 403–04. Interestingly, LaFrance suggests that artists who wish to preserve their copyright termination rights (albeit at the expense of
some tax benefits) replace their loan-out corporations with limited liability companies (“LLCs”); by this arrangement, LaFrance says, “[t]he artist can then function as
an independent contractor rather than an employee, but the LLC structure will still
provide limited liability.” Id. at 404 n.108. Such options are discussed in greater
detail in Part V, infra. While this approach may represent a potential “best practices” suggestion for future artists, however, it offers little consolation to those who
have long relied on loan-out corporations and who have therefore already put their
termination rights at risk.
99
Daniel Gould, Time’s Up: Copyright Termination, Work For Hire and the Recording
Industry, 31 Colum. J.L. & Arts 91, 114 (2007).
98
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79
decidedly more optimistic, reasoning that while the employer-employee relationships embodied in loan-out arrangements are sufficient to satisfy the
tax code, they do not meet the more rigorous common law agency rules
articulated by Reid, and therefore do not cause artists to lose their termination rights.100
In any event, there is no question that, on their face, the employeremployee relationships created in loan-out situations appear to render artists
and writers’ creative efforts works for hire. And the Second Circuit’s decision in the Martha Graham case indicates that courts are willing to so find,
even where the consequences are both potentially antithetical to sound creative arts policy and contrary to the express wishes of the artist or his or her
estate.101
D. Why Should We Care?
Although there are no official statistics on the proportion of artists who
rely on loan-out corporations, their widespread use in the entertainment industry suggests that a sizable percentage — perhaps even a majority — of
artists may have inadvertently forfeited their copyright termination
rights.102 If this is the case, one of the significant policy tenets enshrined in
the 1976 Copyright Act will be substantially undermined, likely contrary to
Congressional intent.103 In fact, nothing in the legislative record indicates
100
Davis, supra note 72, at 116–17. Davis eschews a complete analysis on this
point; we address it directly in greater detail in Part IV.A, infra. For his part,
however, Davis is so confident of the survival of writers’ copyright termination
rights, even in the loan-out context, as to open his article with the statement, “It is
probably not quite fraud, though it comes terribly close to it, when motion picture
and television production companies convince their writers to part with the rights
to their stories when they sign with the companies.” Id. at 93.
101
Martha Graham, 380 F.3d at 640 (ruling against Martha Graham’s testamentary heir and rejecting arguments based on creative arts policy as “a matter of legislative choice for Congress in the future, not statutory interpretation for a court at
present”).
102
To be clear, film and television writers who work on specific commission or
assignment from hiring producers, or who are regularly employed members of a
“writer’s room” staff, would likely be writing on a work-for-hire basis whether or
not they were employed via loan-out corporations. The issue addressed here is principally salient for writers, musicians, and other creative individuals who work independently on a “spec” basis, and who then sell their independently developed or
created works.
103
See supra Section II.A.; See also Gould, supra note 99, at 114 (“It is doubtful
that Congress intended these artists to be denied their termination rights.”).
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that Congress ever discussed or contemplated the impact that loan-out corporations, and the work-for-hire status of works created thereunder, might
have on artists’ termination rights. Moreover, Martha Graham notwithstanding, at least one court (applying the 1909 Act) has demonstrated a
reluctance to construe an artist’s involvement with his own closely held corporation so as to destroy valuable statutory rights under the Copyright
Act.104
One could argue that the loss of termination rights occasioned by an
artist’s use of a loan-out corporation is a fair exchange for the benefits the
loan-out corporation offers in terms of limited liability and beneficial tax
treatment. Indeed, to the extent that one views the use of a loan-out corporation as a “legal fiction” or a “manipulation,” an artist’s loss of termination
rights might be viewed as not merely a fair trade, but just punishment.
Furthermore, because of their start-up and insurance costs, loan-out corporations are generally more prevalent among better-established talent. As a
result, it may be argued that the fundamental policy rationale espoused by
Congress in providing copyright termination rights — protecting the rights
and financial prospects of artists with little bargaining power who give up
their work for sometimes minimal compensation — applies with less salience to the artists facing this quandary.
Yet, except perhaps for the most wildly successful among them, talent
who use loan-out corporations are almost inevitably beholden to powerful
studios, networks, recording companies, or financiers. Moreover, Congress
recognized that the unequal bargaining power burdening authors resulted
not only from their status, but also from the inherent impossibility of determining a work’s value until it has been exploited.105 This concern remains
equally salient to authors of all statures. And whatever one’s view of the
ethics or social desirability of loan-out corporations, it is clear that Congress
never intended to allow for copyright termination rights to be subject to
such trade-offs. Similarly, one cannot credibly assume that artists who have
elected to form loan-out corporations (or their representatives) have ever
been mindful of such an implicit exchange. Rather, as the legislative record
demonstrates, the 1976 Copyright Act’s copyright termination provisions
represent a considered legislative judgment on creative arts policy. The
104
Donaldson Publ’g Co. v. Bregman, Vocco & Conn, Inc., 375 F.2d 639, 643
(2d Cir. 1967) (preserving an author’s copyright renewal rights, to be exercised by
his heirs, by finding that the author was not an “employee” of his own closely-held
corporation because the corporation did not exercise sufficient control over the author or pay him a regular salary).
105
H.R. Rep. No. 1476, at 124 (1976).
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broad use of loan-out corporations, and the legal intricacies involved therein,
seem to specifically and powerfully undermined both that legislative judgment and the delicate balance between creative individuals and major corporate entities embodied in the Copyright Act.106
IV. POTENTIAL WAYS TO RESCUE ARTISTS ’ TERMINATION
RIGHTS IN THE LOAN -OUT CONTEXT
In light of the foregoing, it is apparent that artists’ reliance on loan-out
corporations jeopardizes their copyright termination rights by bringing
their creations within the scope of the work-for-hire carve-out. The challenge, then, is to find a way to give effect to Congress’s manifest intent to
afford artists the benefit of these copyright termination rights, and thereby
bridge the divide between industry practice and social policy.
A. Reading Reality Into the Copyright Act: Preserving Termination
Rights By Statutory Interpretation
One way to try to preserve artists’ termination rights without jeopardizing the other benefits that artists enjoy from loan-out corporations is to
look to the language of the Copyright Act itself for a reading that would
preserve such rights even in a loan-out-based work-for-hire situation. While
such an approach is initially appealing, in fact, it seems difficult, if not
impossible, to generate a plain language reading of the relevant provisions of
the Copyright Act that would hold up to serious scrutiny.
As described in greater detail above, loan-out arrangements in the entertainment industry involve two basic contractual relationships: the first
between an artist and his or her loan-out corporation, and the second be106
This may also, in fact, be part of a broader trend toward curtailing copyright
termination rights. Professors Peter S. Menell and David Nimmer have argued that
recent decisions in the Second and Ninth Circuits interpreting the 1976 Copyright
Act’s statutory termination provisions have already “undermine[d] the provisions of
the Copyright Act that guarantee the right of reversion to authors and statutorily
designated successors” and that, in so doing, “they disrupt the overall statutory
scheme, block authors’ statutory successors from realizing their congressionally
mandated interests, and cast clouds of uncertainty and confusion over the ownership
of many valuable copyrights.” Peter S. Menell & David Nimmer, Pooh-Poohing Copyright Law’s “Inalienable” Termination Rights, 57 J. Copyright Soc’y U.S.A. 799,
857 (2010). Menell and Nimmer call for legislative reform while offering a “comprehensive framework for restoring the integrity and clarity of the termination of
transfer provisions.” Id. at 799.
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tween the loan-out corporation and a producer.107 As a result, an artist’s
proprietary copyright interest in a work is actually involved in two separate
contractual movements, from the artist to his or her loan-out as a work for
hire,108 and from the loan-out to the producer via assignment.109 It may be
possible to salvage artists’ copyright termination rights in the loan-out context by focusing on these transfers as independent acts. In effect, the argument is that, in determining the terminability of a copyright transfer, the
court need only look to the transfer being terminated. By this reasoning, because the transfer from loan-out corporation to producer is the transfer at
issue, it would be eligible for termination because it is not, itself, a workfor-hire arrangement, and any preceding work-for-hire arrangement is
irrelevant.
The source of this argument is the very first sentence of Section 203(a)
of the Copyright Act, which reads: “In the case of any work other than a work
made for hire, the exclusive or nonexclusive grant of a transfer or license of
copyright or of any right under a copyright . . . is subject to termination.110
The first clause of this provision can be arguably read to mean, effectively,
“in the case of any transfer of interest other than a work-for-hire arrangement.”
With this reading, to preserve his termination rights, an artist need only
establish that the transfer of rights from the loan-out corporation to the
producer was not a work-for-hire arrangement. In cases where the work at
issue predated the agreement between loan-out and producer, this should be
an easy showing to make.
This argument has obvious appeal. In the first place, it offers a fourcorners reading of the plain language of the Copyright Act that preserves the
legislative intent embodied in the Act’s copyright termination provisions:
protecting artists with limited bargaining power and foresight from copyright transfers that, in hindsight, turn out to be obviously undercompensated.111 In addition to representing sound creative arts policy, this
107
See supra Section III.A.
Although strictly speaking, this is not a transfer as such because, in a workfor-hire situation, the employer is deemed to be the legal author of the work, in
practice, the contractual work-for-hire arrangement represents a transfer of the legal
interest in the work.
109
As previously noted, many producers include work-for-hire language in their
agreements with the loan-out corporations as a “belt and suspenders” measure. See
supra note 75 and accompanying text. However, the law is clear that contractual
work-for-hire language is not sufficient to transform an assignment of preexisting
work into a work made for hire.
110
17 U.S.C. § 203(a) (2006) (emphasis added).
111
See generally supra Section II.A.
108
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approach empowers courts to achieve socially desirable results without
resorting to nebulous common law principles or a direct legislative fix-it
job.112
It would not be unprecedented for a court to take a narrow view of the
relevant transaction to achieve a result that preserves its understanding of
Congress’s intent. For example, in Larry Spier, Inc. v. Bourne Co., the Second
Circuit (reversing the district court) held that a songwriter’s testamentary
grant of renewal copyrights did not preclude the songwriter’s family from
terminating an earlier assignment of such renewal copyrights to a corporation under Section 304(c).113 In so holding, the court reasoned that the
legislative history of Section 304(c) demonstrated a legislative intent to specifically protect the rights of authors’ widows and children, which partially
justified the court’s narrowed focus on the songwriter’s original assignment
of rights (i.e., the grant which the songwriter’s heirs then sought to terminate) and its refusal to consider the songwriter’s later testamentary grant.114
To be sure, this case represents an imperfect analogy. As between the two
grants by the songwriter, the court in Larry Spier, Inc. allowed termination
of the first in time and ignored the potentially contrary implications of the
second. In the loan-out context, however, a court would have to allow termination of the second grant in time and ignore the potentially contrary implications of the first. Nevertheless, it does demonstrate the dominant role
played by legislative intent in judicial analysis of copyright termination
rights, as well as the willingness of some courts to adopt a narrow focus to
preserve that intent.115
Ultimately, however, this nuanced reading of the Copyright Act’s statutory termination provisions is unlikely to prevail because, while it preserves the general legislative intent behind copyright termination, this
particular reading of Section 203(a) actually seems contrary to the legislative
record. The language of Section 304(c) — the sister provision to Section
203(a) that governs pre-1978 copyright transfers — is revealing. The analogous precatory language of Section 304(c) reads, “[i]n the case of any copyright subsisting in either its first or renewal term on January 1, 1978, other than a
112
See infra Part V.A.
Larry Spier Inc. v. Bourne Co., 953 F.2d 774, 779–80 (2d Cir. 1992).
114
Id. at 779–80. The lower court, on the other hand, had justified its rejection
of the author’s family’s termination rights as effectuating the apparent testamentary
intent of the songwriter, who had made his mistress (together with his widow and
children) one of the beneficiaries of his will. Larry Spier, Inc. v. Bourne Co., 750 F.
Supp. 648, 651 (S.D.N.Y. 1990).
115
See also infra Part IV.B.1 (discussing Donaldson Publishing Co. v. Bregman,
Vocco & Conn, Inc., 375 F.2d 639 (2d Cir. 1967)).
113
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copyright in a work made for hire, the exclusive or nonexclusive grant of a
transfer or license of the renewal copyright or any right under it . . . is
subject to termination .”116 The language of Section 304(c) is quite clear
that the phrase, “in the case,” refers to copyrights that are works-for-hire, not
to transfers that are works for hire, as would be necessary to preserve termination rights in the loan-out context. Further, there is simply no indication
that Congress intended copyright termination rights to function so differently under Section 203 (for post-1978 transfers) and Section 304(c) (for
pre-1978 transfers). In light of the foregoing, a reading of Section 203 that
is so plainly inconsistent with the clearer language of Section 304(c) seems
dubious at best.117
Relying on such statutory interpretation to preserve termination rights
would create another major logistical complication: assuming that copyright
termination rights survive a loan-out based transaction, who or what entity
would hold them? Because the grant being terminated is that from loan-out
corporation to producer, and because under the work-for-hire doctrine the
loan-out corporation is deemed the legal author of the work from inception,
it stands to reason that the loan-out corporation (and not the artist personally) would therefore hold the termination rights.118 Yet such a result is
116
17 U.S.C. § 304(c) (2006) (emphasis added).
Of course, it could be argued that this discrepancy actually supports a reading
of Section 203(a) that, contrary to the plain language of Section 304(c), preserves
copyright termination rights, in that the variation in language between the two
sections (which are otherwise largely identical) evidences an intent to produce divergent substantive results. Cf. Larry Spier, Inc. v. Bourne Co., 953 F.2d 774, 779 (2d
Cir. 1992) (“Significantly, Section 203 and Section 304 are different provisions involving different rights. . . . Section 304(c) is designed to protect a new family
property right that does not exist under Section 203, and references to the history of
Section 203 therefore are inappropriate here.”). However, there is a far less substantively significant explanation for the linguistic discrepancy between Sections 203(a)
and 304(c): because Section 304(c) deals with termination rights for pre-1978
grants, it must address the status of common law copyrights (and grants thereof),
which are not a factor for Section 203(a) in light of the 1976 Copyright Act’s broad
preemption of common law copyrights. See 17 U.S.C. §§ 301, 303(a). Section
304(c)’s more specific reference to “any copyright subsisting in either its first or
renewal term,” then, is more likely meant to inform the status of grants of common
law copyright (which are not eligible for termination at all) than it is to indicate an
intention that the work-for-hire limitation be construed differently for Section
203(a) vs. Section 304(c) terminations. 17 U.S.C. § 304(c); See Nimmer & Nimmer, supra note 36, § 11.02[A][1] (2006).
118
Of course, this quirk is also avoidable if the grant of rights from the artist to
his loan-out corporation is itself terminable, which would have the effect of terminating all further grants of rights in the chain-of-title. However, because we con117
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clearly contrary to what is contemplated by the plain language of Sections
203 and 304(c), which demonstrates a clear congressional intent to limit
termination rights to actual authors/natural persons and their families, and
not corporate entities.119 The only apparent way to reconcile this conflict
would be to find that the loan-out corporation holds the copyright termination rights in a constructive trust for the natural author as beneficial owner.
There is precedent for such judicial machination with respect to the Copyright Act. For example, courts have used judicially imposed constructive
trusts to protect copyrighted works from inadvertently falling into the public domain as a result of the rigid and sometimes harsh rules on copyright
notice, renewal, and indivisibility under the 1909 Act.120 However, the fact
that this interpretation of the Copyright Act would require such further
judicial contortionism seems to weigh against its plausibility or viability.
In light of the foregoing, reading Section 203(a)’s provision, “[i]n the
case of any work other than a work made for hire” to mean “in the case of any
transfer of interest other than a work-for-hire arrangement” seems to be an obvious post facto manipulation of the statute’s plain language. While it would
offer a result that is both consistent with sound creative arts policy and with
Congress’s general intent in enacting the Copyright Act’s termination provisions, this reading is ultimately too problematic to succeed.
clude that any attempt to attack the work-for-hire status of loan-out corporation
services is unlikely to succeed, see infra Part IV.B, it necessarily follows that an artist
would have no more success terminating his grant of rights to his loan-out corporation than he would terminating the grant of rights from the loan-out to the actual
purchasing entity.
119
See 17 U.S.C. §§ 203(a), 304(c) (referencing “widow[s]” and “children,” and
giving extremely detailed statutory instructions regarding the inheritability of copyright termination rights among an author’s descendants).
120
See, e.g., Goodis v. United Artists Television, Inc., 425 F.2d 397, 399–403
(2d Cir. 1970) (where author has no apparent intention to donate work to public,
publication of author’s work in a magazine bearing a copyright notice in magazine’s
name did not inject work into public domain under 1909 Act because magazine
held copyright registration in constructive trust for author as beneficial owner);
Abend v. MCA, Inc., 863 F.2d 1465, 1469–70 (9th Cir. 1988) (same); Edward B.
Marks Music Corp. v. Jerry Vogel Music Co., 140 F.2d 266, 267 (2d Cir. 1944)
(under the 1909 Act, “if one of several authors took out the copyright in his own
name upon a joint work, the copyright was valid, but the copyright owner held it
upon a constructive trust for the other authors”). (citing Maurel v. Smith, 271 F.
211 (2d Cir. 1921)).
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B. Unraveling the Legal Fiction: Attacking the Work-for-Hire Status of
Loan-out Corporation Services
Given that the language of the Copyright Act itself probably cannot be
reasonably read to guarantee termination rights to artists creating works for
hire on behalf of their own loan-out entities, alternative approaches are
needed. One option is to try to determine whether the works created by
these artists are truly works made for hire. As discussed above,121 the titles
or descriptions used by the parties, while often persuasive, are not determinative of the existence of an employment or other for-hire relationship. The
question is whether, under either the 1909 or 1976 Acts, courts will disregard a loan-out entity specifically created to employ the artist, and nevertheless find that the artist is not an employee for hire.
1. Work-for-Hire Status of Loan-out Corporation Services
Under the 1909 Act
Courts deciding the status of a work made prior to January 1, 1978
examine whether the work was created at the hiring party’s “instance and
expense.”122 This test is satisfied “when the employer induces the creation
of the work and has the right to direct and supervise the manner in which
the work is carried out.”123
In applying the 1909 Act test, courts have taken a fairly liberal view of
the degree to which a hiring party must be involved in the creation of a
work, whether at the inducement or preparation stage. For example, in
holding that certain of Martha Graham’s choreographed dances were works
made for hire, and were therefore owned by a non-profit corporation of
which she was the artistic director, the Second Circuit counseled that:
121
Brattleboro Publishing Co. v. Winmill Publishing Corp., 369 F.2d 565,
567–68 (2d Cir. 1966).
123
Martha Graham Sch. & Dance Found., Inc. v. Martha Graham Ctr. of Contemporary Dance, Inc., 380 F.3d 624, 634–35 (2d Cir. 2004). See also Playboy
Enters, Inc. v. Dumas, 53 F.3d 549, 554 (2d Cir. 1995) (instance and expense test
met “when the motivating factor in producing the work was the employer who
induced the creation.”) (quoting Siegel v. Nat’l Periodical Publ’ns, Inc., 508 F.2d
909, 914 (2d Cir. 1974)); Self-Realization Fellowship Church v. Ananda Church of
Self-Realization, 206 F.3d 1322, 1326–27 (9th Cir. 2000) (“instance” test is
shaped in part by the degree to which the “hiring party had the right to control or
supervise the artist’s work”) (quoting Nimmer & Nimmer, supra note 36,
§ 5.03[B][1][a][i].
122
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87
[t]here is no need for the employer to be the precipitating force behind
each work created by a salaried employee, acting within the scope of her
regular employment. Many talented people, whether creative artists or
leaders of major corporations, are expected by their employers to produce
the sort of work for which they were hired, without any need for the employer to suggest any particular project.124
Likewise, as other courts have noted, the hiring party’s right to control or
supervise the creator’s work is one that need not actually be exercised in
order to result in a work made for hire.125
The Martha Graham court was willing to find the affiliated Martha
Graham Center for Contemporary Dance the owner of her choreographed
dances notwithstanding that she was, in fact, the motivating force in creating any given artistic work. The Center, however, was not a loan-out corporation, and did bear the hallmarks of a legitimate non-profit. For example,
Graham herself was ultimately answerable to a separate and independent
board of directors.126
If there is any relationship that is capable of not yielding a work made
for hire under the 1909 Act’s “instance and expense” test, the typical loanout corporation would seem to be a good candidate. Notwithstanding the
nominal right of the loan-out “employer” to direct the activities of its “employee,” there is usually in reality no true employer at all — nor supervising
party, nor board of directors — that has the ability to control the work of
the “employee,” let alone one that actually exercises this power.
There is some precedent for finding that works created by an artistcontrolled entity are not “for hire” under the 1909 Copyright Act. In Donaldson Publishing Co. v. Bregman, Vocco & Conn, Inc.,127 the Second Circuit was
called upon to determine whether the renewal copyright interests in songs
written by Walter Donaldson were owned by his heirs or by a publishing
company which bore Donaldson’s name and of which he had been the president. The answer depended on whether the songs were works made for hire,
124
Martha Graham, 380 F.3d at 640–41.
See, e.g., Epoch Producing Corp. v. Killiam Shows, Inc., 522 F.2d 737, 744
(2d Cir. 1975) (explaining that the hallmark of “an employment for hire” is
whether the employer “could have exercised the requisite power to control or supervise [the creator]’s work”) (emphasis added).
126
Martha Graham, 380 F.3d at 640.
127
375 F.2d 639 (2d Cir. 1967).
125
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which in turn hinged on whether Donaldson was an employee of the publishing company.128
In arguing that Donaldson was an employee for hire, the publishing
company’s successor in interest pointed to language in his contract providing that Donaldson “shall have a drawing account against your royalties of
$300. [sic] per week during the first six months of your employment.”129
The court, however, rejected the argument that this language evidenced the
parties’ intent that Donaldson would be an employee or that his drawing
account was equivalent to a salary. The actions of the parties and the construction of the agreement instead demonstrated that Donaldson was not an
employee for hire. For example, Donaldson was free to engage in outside
writing activities for independent income that he need not share with the
corporation. Moreover, “[n]o power to control or supervise Donaldson’s performance was reserved to the corporation or exercised by it.”130 The reference to “employment” in Donaldson’s agreement was dismissed as a shorthand way of saying “the period during which you will be writing songs to
which the corporation has certain rights and will have certain royalties coming to you from such songs.”131
While not discussed by the Court, Donaldson could be seen as another
example of an effort to interpret the language and circumstances of the parties’ relationship in a manner that preserves congressional intent.132 Had the
court held that Donaldson were an employee for hire of the defendant music
publishing company, the renewal rights in Donaldson’s copyrighted works
would have been held by the corporation. Donaldson’s children would have
been deprived of these rights, in contravention of congressional intent to
confer the benefit of the renewal term on authors and their heirs.133
It would be risky to read too much into Donaldson, however. First,
other than the rather oblique reference to “employee” contained in the
agreement, there was no evidence that either Donaldson or the defendant
music publishing company intended to enter into an employment relationship, and the employer did not have the right to direct and control the
employee’s work, which is a hallmark of such a relationship. The unstated
128
Under the 1909 Act, an employer for whom a copyrighted work is made for
hire held renewal rights in the work. 1909 Act, at § 24; see also Donaldson, 375 F.2d
at 641.
129
375 F.2d at 641 n.4.
130
Id. at 642–43.
131
Id. at 642.
132
See supra Section II.A.
133
See supra notes 13–16 and accompanying text.
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suggestion was that, had the language of the contract and the parties’ course
of dealings more persuasively evidenced an employment relationship, this
would have been upheld by the court, notwithstanding the heirs’ loss of
renewal rights.134
Indeed, the Second Circuit later noted in Graham that, even though
Martha Graham was a self-motivator and likely would have choreographed
her dances even if the Martha Graham Center of Contemporary Dance had
never existed, this was beside the point: “Where an artist has entered into
an explicit employment agreement to create works, works that she creates
under that agreement cannot be exempted from the work-for-hire doctrine
on speculation about what she would have accomplished if she had not been
so employed.”135
Given that artists are required to be employed by their loan-out corporations in order to obtain the favorable tax treatment for which those corporations are designed,136 artists attempting to circumvent their loan-out
corporations face a daunting tightrope to walk: they must convince a court
that they are employees in the eyes of the IRS, but not in the eyes of the
Copyright Act. This could be an extremely difficult task. Indeed, we are
not aware of any reported decision under the 1909 Act in which an individual who expressly intended to be the employee of a corporation was nevertheless able to convince a court that he was an independent contractor for
the purpose of circumventing the work-for-hire doctrine.
2. Work-for-Hire Status of Loan-out Corporation Services
Under the 1976 Act
As required by CCNV v. Reid, an analysis of whether an artist is an
employee of his or her loan-out corporation under the 1976 Act will depend
upon the application of common law agency principles, the most important
of which are: (1) the corporation’s right to control the manner and means of
creation; (2) the skill required; (3) the provision of employee benefits; (4) the
134
A later court of appeals distinguished Donaldson, finding that the creator of a
book of menus was an employee for hire where the book was published at the insistence of defendant corporation and where the corporation had the right to direct and
control plaintiff’s work — even though the corporation “delegated” its right of
supervision to the employee itself and even though the “precise nature” of the parties’ putative employment relationship was unclear. Murray v. Gelderman, 566
F.2d 1307, 1310–11 & n.6 (5th Cir. 1978).
135
Martha Graham Sch. & Dance Found., Inc. v. Martha Graham Ctr. of Contemporary Dance, Inc., 380 F.3d 624, 640 (2d Cir. 2004).
136
See supra Section III.A.
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tax treatment of the hired party; and (5) whether the corporation has the
right to assign additional projects to the hired party.137
Although styled as an employer-employee relationship, the typical
loan-out’s employee is an employee in name only. While nominatively
drawing a salary and benefits from the corporation, the loan-out company’s
employee will personally decide (often with the help of an agent or manager
not separately or formally employed by the loan-out) which types of projects
to create. There is usually no direction or guidance from an employer, because there is usually no true employer at all — nor supervising party, nor
board of directors — that can exercise control over the “employee’s” work.
Yet in order to achieve the tax benefits that the loan-out corporation is
designed to accomplish, the contract between the artist and his loan-out
corporation must give lip service to the corporation’s ability to exercise control, however unrealistic this may be in practice. Indeed, as discussed above,
the artist must demonstrate the existence of a genuine employment relationship with the loan-out corporation, in accordance with common law agency
principles — the same principles utilized by the Reid court in its work-forhire analysis — in order for the loan-out arrangement to pass muster with
the IRS.138 Corporate lawyers would be advised to ensure that these principles are written into every contract.
Thus, a modern employment contract between an artist and his loanout company will usually be quite clear about the rights the company has
vis-à-vis the artist and will give lip service to all of the important Reid
factors. The contract will provide that the employee will be paid a fixed
salary by the company (along with bonuses to be paid in the company’s sole
discretion), which will be subject to withholding taxes; that the employee
will receive benefits, including vacation time, health insurance, pension and
profit-sharing; and that the employee shall render such services as the company may reasonably require, and shall do so under the company’s direction,
supervision, and control.139 As discussed above, the agreement may even
confirm the parties’ intention that all works performed by the artist on behalf of the company be considered works made for hire under the Copyright
Act.140 In other words, under the 1976 Copyright Act, an artist whose representatives craft a loan-out arrangement which is designed to withstand
IRS scrutiny will, necessarily, create a loan-out arrangement which will
137
138
139
140
See
See
See
See
supra Section II.C.2.
supra Section III.A.
Farber & Cross, supra note 94, Form 7-1.
supra Section III.C.
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compel a conclusion that the artist’s works are works made for hire in favor
of the loan-out corporation.
Ultimately, because of the unambiguous language of such agreements,
artists wishing to avail themselves of statutory termination rights will be
placed in the unenviable position of having to explain to a court that the
contractual language did not represent the true state of affairs and was designed only to take advantage of otherwise unavailable favorable tax laws.
3. Conclusion: Challenges to the Work-for-Hire Status of Loan-out
Corporation Services Will Be Difficult
For artists wishing to retain both favorable tax treatment and statutory
termination rights, the unfortunate truth is that the conditions that a loanout must satisfy in order to withstand IRS scrutiny are the very factors that
weigh in favor of an employment relationship for copyright purposes.
Courts have required that a service provider be an employee of the loan-out
corporation, and that the corporation have the right to direct or control the
service provider in some meaningful sense.141 Cognizant of the suspicion
with which these loan-out relationships are met by the taxing authorities,
and wanting to stay one step ahead in their ongoing game of cat-and-mouse
with the IRS, lawyers have taken to drafting agreements for artists that are
designed to leave no question that the artist is employed by his loan-out
corporation.142 The corporation is given the absolute right to direct and
control the artist’s professional activities, whether or not this right is actually exercised or could ever realistically be exercised. The other common law
agency principles counseling in favor of an employment relationship are satisfied, if only nominally. And if the artist-employee later tries to distance
himself from this contractual language, he risks revealing the loan-out as a
sham, possibly subjecting himself to a host of adverse tax consequences and
penalties.
In short, artists hoping to avoid the loss of statutory termination rights
by piercing their own corporate veils face uncertain prospects of success, as
well as a variety of unintended consequences which could very well outweigh the benefits of making such arguments.
141
142
See supra note 85 and accompanying text.
See supra notes 139–140 and accompanying text.
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V. BACK
TO THE
DRAWING BOARD : LEGISLATIVE REFORM
BEST PRACTICES
AND
INDUSTRY
Given the general lack of awareness of the unintended impact of loanout corporations on artists’ copyright termination rights, and the continued
widespread use of such corporations, the conflict explored in this article is
likely to become more and more pervasive with time. As the discussion
above makes clear, while there are arguments available to artists who wish to
preserve their copyright termination rights notwithstanding their use of
loan-out corporations. However, their odds of success are uncertain at best,
and they are likely to be met with fierce resistance by industry players with
strong vested interests in shielding themselves and their investments from
the potentially costly nuisance of copyright termination. Consequently,
having already looked backward to explore how to preserve the legislative
intent embodied in the Copyright Act’s termination provisions for those
artists who have already inadvertently jeopardized their termination rights
by using loan-out corporations, we must now look forward at how to mitigate this problem in the future.
A. Potential Revisions to the Copyright Act
Perhaps the most obvious solution is to simply return to the text of the
Copyright Act itself, and amend the language of Sections 203 and 304(c) to
ensure that an artist’s use of a loan-out corporation does not destroy his or
her termination rights.
This change could be effected by inserting a single, narrowly tailored
parenthetical into the relevant provisions. Section 203(a), for example,
would read as follows:
In the case of any work other than a work made for hire (unless the legal
author of such work made for hire is a corporation which is owned in
whole or in majority part by the individual author of the work, in which
case such individual author shall be deemed the legal author of the work
for purposes of this subsection), the exclusive or nonexclusive grant of a
transfer or license of copyright or of any right under a copyright, executed
by the author on or after January 1, 1978, otherwise than by will, is subject to termination under the following conditions . . . .
Section 304(c) would be similarly amended by adding the same new parenthetical after the phrase “other than a copyright in a work made for hire.”
This change is drafted as narrowly as possible under the circumstances,
thereby avoiding the kind of unintentional disruptions to other contractual
relationships or elements of the copyright law implicated by the broader
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statutory interpretation explored in Section IV.A above.143 The revision
protects termination rights in cases where the “legal author” — i.e., loanout corporation serving as employer/commissioning entity — is owned in
whole or in majority part by the individual author of the work. This phraseology captures loan-out corporations in which the author, for tax, management, or personal reasons, shares ownership of his or her loan-out
corporation with a family member or agent, manager, or other representative. Finally, because Sections 203 and 304(c) clearly contemplate that termination rights are to be held only by natural persons (artists) and their
families/descendants, and not corporate entities, this revision expressly
deems the individual author to be the legal author of the work for purposes
of the Copyright Act’s termination provisions. This ensures that the rescued
termination rights vest in the artists themselves, rather than in their loanout corporations.
The appeal of this approach is clear. An amendment to the Copyright
Act’s termination provisions that is addressed specifically to the role of loanout corporations in copyright-intensive industries would resolve the existing
conflict with deliberative policymaking, rather than judicial wrangling. It
would unambiguously reconcile legislative intent with industry realities,
and provide a key legislative clarification and/or affirmation of national creative arts policy.
In the short-term, however, it would be unwise for artists and their
representatives to rely on legislative change alone to come to their rescue.
While performing artists have demonstrated some sway when acting cohe-
143
A similar, but somewhat broader and more aggressive approach, would be to
insert a slightly adapted version of the parenthetical suggested here directly into the
definition of “work made for hire” in Section 101 of the Copyright Act, thereby
altogether excluding works created under loan-out arrangements from work-for-hire
status. This would have broader-reaching consequences for copyrights created
under loan-out arrangements, such as altering the term of copyright protection and
rendering such copyrights subject to greater so-called “moral rights” protections.
There is some appeal to this approach, simply because the difference between works
created by artists in their fully individual capacities vs. through loan-out corporations is no more compelling with respect to their treatment under these provisions
of the Copyright Act than it is with respect to their treatment for termination
purposes, nor is there any indication that Congress intended the use of loan-out
corporations to affect the status of the subject copyrights with respect to term,
moral rights, or otherwise. Nevertheless, in an effort to narrowly tailor our solution
to the problem explored in this article, and to avoid any unintended externalities
from taking a more expansive approach, we have foregone actually changing the
definition of “work made for hire” here.
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sively as a policy-oriented interest group,144 legislative reform is inevitably a
trying, time-consuming, and compromise-filled proposition. It would
surely be influenced, if not altogether stymied, by significant counter-lobbying efforts from powerful industry elements who would benefit immensely
from exploiting the “loan-out loophole” in the copyright termination regime. Moreover, except for the major ground-up reform effort embodied in
the 1976 Copyright Act and subsequent heavily lobbied-for amendments
extending the term of copyright, Congress has seemed largely content to
allow the courts to resolve the gaps and ambiguities of copyright law.145 In
this context, artists and their lawyers must take proactive steps to adopt new
“best practices” that adapt to the copyright law as it is, rather than waiting
indefinitely for the copyright law to become what they think it should be.
B. Contractual Solutions to Legislative Problems
Pending such specifically tailored legislative intervention, there are
nevertheless steps that savvy, issue-conscious lawyers may be able take to
protect their clients’ interests. While existing elements of tax and copyright
law render these solutions imperfect in their own right, these simple steps
would offer some progress in protecting and effectuating the apparent legis144
In 1999, in response to intense lobbying from the record industry, and with
little analysis or debate, Congress adopted a “technical amendment” that expressly
added sound recordings to the list of specifically enumerated works eligible for
work-for-hire status under the Copyright Act. The change was met with an immediate, highly public, and intensely disapproving reaction from artists, including
well-known musicians like Don Henley and Sheryl Crow, and after convening a
brief hearing, Congress quickly retroactively repealed the amendment. See LaFrance,
supra note 66, at 375–90.
145
For example, the major developments in copyright law meant to adapt to the
Internet era of copyright exploitation and infringement have almost uniformly
originated with the courts, rather than with Congress. See, e.g., MGM Studios, Inc.
v. Grokster, Ltd., 545 U.S. 913 (2005) (announcing new “inducement” theory of
copyright liability for manufacturers of devices or services with both legitimate and
copyright-infringing functions); Sony Corp. v. Universal City Studios, 464 U.S. 417
(1984) (longstanding case on equipment manufacturers’ potential liability as contributory copyright infringers revised by the Supreme Court in Grokster); In re Aimster, 334 F.3d 643 (7th Cir. 2003) (Seventh Circuit’s effort to grapple with digital
age contributory copyright infringement case by adopting “willful blindness” theory of liability; superseded by Supreme Court in Grokster); A&M Records, Inc. v.
Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) (landmark decision holding that Internet file-sharing service could be held liable on contributory and/or vicarious copyright infringement theories).
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lative intent of the Copyright Act’s termination provisions in the loan-out
context.
1. Alternative Organizational Forms
While the vast majority of artists rely on loan-out corporations, there are
other organizational structures available which may allow artists to avoid
putting their termination rights at risk. For example, Mary LaFrance has
suggested that artists may loan out their services through Limited Liability
Companies (or “LLCs”)146 in order to preserve their termination rights.147
When rendering services for an LLC in which the artist is the managing
member, the artist may work as an independent contractor rather than as an
employee of the LLC. In so doing, the artist avoids converting his or her
creative work into a work for hire for which the loan-out entity is the legal
author, thereby preserving his or her termination rights.
It is not uncommon for artists to rely on different corporate forms for
different purposes. For example, most American artists, athletes, and entertainers organize as C corporations. However, when an American actor works
in Canada, Canadian tax law creates a risk of “double taxation” — i.e.,
taxation of income received by the loan-out corporation and then again
when the same income is distributed to the actor.148To compensate, Ameri146
Limited Liability Companies began entering into widespread use in the
1990s, in response to demand from small business owners for an organizational form
that better met their needs. While the precise contours of the form vary from state
to state, in general, LLCs are understood to combine four basic features: (1) limited
liability (similar to corporations); (2) “pass-through” tax treatment (similar to partnerships); (3) chameleon management (i.e., the ability to choose between centralized
and direct member-management); and (4) creditor protection. For a general primer
on LLCs, see, e.g., Robert R. Keatinge et al., The Limited Liability Company: A Study of
the Emerging Entity, 47 Bus. Law. 378 (1992); Larry E. Ribstein, The Emergence of the
Limited Liability Company, 51 Bus. Law. 1 (1995).
147
See LaFrance, supra note 66, at 404 n.109.
148
See Mark Jadd, Norman Bacal, & Kay Leung, Performing in Canada: Taxation
of Non-Resident Artists, Athletes, and Other Service Providers, 56 Canadian Tax J. 589,
596 (2008) (“[T]he use of a loan-out company creates the possibility of double
taxation. A loan-out company is generally not taxable in the United States (since its
net income is generally nil); consequently, it cannot take advantage of any foreign
tax credits in respect of taxes paid by it in Canada. Furthermore, since actors performing services in Canada through a loan-out company historically have not paid
Canadian income tax (generally, only the source deductions in respect of payments
to the loan-out company are remitted to the Canadian tax authorities), they have not
been able to claim a tax credit against US tax on the salaries received from the loanout company. This problem is obviated, when possible, by either using a US fis-
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can actors working in Canada often contract with employers directly or use
separate S corporations for their Canadian services, and may bifurcate their
employment agreements and compensation based on the geography of their
various services on a single project.149
Converting to LLCs is, however, at best a deeply imperfect solution.
While the LLC offers the artist substantially (but not completely) the same
“limited liability” benefit as a loan-out corporation would,150 the tax treatment of such companies makes them significantly less beneficial to entertainers who rely on their loan-out corporations primarily for their financial
benefits (which, in turn, derive primarily from their tax-shielding properties). This is because LLCs, like partnerships, are subject to so-called “passthrough” tax treatment — that is, the entity itself is not taxed, but the
underlying members are taxed on the entity’s income as it if it was their
own.151 Put another way, “For federal income tax purposes, the LLC is not a
separate taxpaying entity and is not subject to tax at the entity level. Instead, the LLC’s members report their respective distributive shares of LLC
income, gain, loss, and deduction and credit on their individual federal incally transparent entity (such as a qualified subchapter S corporation) as the loan-out
company, or having the actor personally enter into the contract for the provision of
Canadian services. The latter arrangement has sometimes resulted in an odd situation for Canadian productions, where rehearsal services in the United States or acting services outside Canada are provided by the actor through the loan-out company
while Canadian acting services are provided by the actor personally, under separate
contracts.”).
149
Id.
150
Indeed, LaFrance has noted that the limited liability offered by LLCs actually
potentially undermines the argument that limited liability offers an adequate nontax motivation for an entertainer’s decision to render services through a C corporation, although the scope of that limited liability is comparatively incomplete. See
LaFrance, supra note 76, at 923–24 n.150 (“The argument that pursuit of limited
liability is an adequate nontax motivation for forming a personal service corporation
might also be unpersuasive where the taxpayer has the option, under state law, of
forming a limited liability company (‘LLC’), which could enjoy limited liability
without being classified as a corporation for federal income tax purposes. However,
because it is uncertain whether an LLC enjoys limited liability with respect to its
activities in jurisdictions that do not recognize its LLC status, many taxpayers still
have a reason to prefer incorporation.”).
151
See Cohen, supra note 76, at 116–17 (“[T]he structures of a limited liability
company (‘LLC’) . . . will not provide the desired tax benefit to an entertainer”
because “‘limited liability companies . . . are treated for tax purposes as conduits
whose income and deductions pass through to the partners or members as they are
realized, with the various items retaining their original character in the process.’”)
(quoting Stephen A. Lind et al., Fundamentals of Corporate Taxation 703
(4th ed. 1997)).
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come tax returns.”152 As a result, an artist who works through an LLC effectively has the same treatment as an artist working without any loan-out
entity, losing out on the lower corporate tax rates and more aggressive cost
deduction against income taxes that come with the traditional corporate
form. Moreover, in California (where most major participants in the entertainment industry reside), LLCs with total annual California income in
excess of $250,000 are subject to significantly higher annual statutory fees
than traditional corporations would be.153 In essence, then, trading a loanout corporation for an LLC means, in effect, preserving one’s termination
rights at the cost of less advantageous tax treatment and higher fees. It is not
a tradeoff that every artist will be prepared to make.
2. Contractual Copyright Ownership Arrangements
An author utilizing a loan-out corporation may be able to eliminate or
ameliorate some of the potentially draconian consequences discussed in this
article through careful draftsmanship. Specifically, rather than (as is the
common current practice) explicitly providing that the author’s contributions to his or her loan-out employer are works made for hire, the author’s
agreement with his loan-out could instead provide that ownership of any
copyrights is expressly reserved to the artist, but such copyrights are assigned
to the loan-out.154 The effect would be the same, in that the loan-out company would own the copyright in the work and could thereafter assign it to
third parties. But the author would be able to subsequently terminate the
initial assignment (thereby breaking the chain of transfers that followed,
effectively terminating the assignment to the purchasing entity).
In principle, the 1909 and 1976 Copyright Acts both permit this type
of contractual deviation from the default presumptions of copyright owner152
Continuing Education of the Bar of California, Forming and Operating California Limited Liability Companies § 5.7 (2d ed. 2009).
153
Compare id. at § 5.5 (statutory fees ranging from $900 to $11,790 depending
on annual income), with Cal. Rev. & Tax Code § 23153 (West 2011) (no minimum franchise tax in a corporation’s first year, $500 in the corporation’s second
year, and $800 per year thereafter).
154
As discussed in Part IV.B.2, supra, the same common law agency principles
that determine the capacity of loan-out corporations to withstand IRS scrutiny form
the basis of the “employment” test used to determine work-for-hire status under
the 1976 Copyright Act. Consequently, it is not enough to simply eliminate the
explicit “work-for-hire” language from a loan-out employment agreement, as the
default presumption under the law is nevertheless that any works created in the
course and scope of an artist’s employment are deemed works made for hire as a
matter of law.
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ship that apply in employer-employee relationships. An employer and employee can prospectively agree, for example, that the copyright in all works
prepared by the employee during the course of the employment relationship
belong to the employee instead of the employer.155 As the Second Circuit
held in Eisenberg v. Advance Relocation Storage, Inc.:156
By contract, a worker and a firm may agree that the worker will or will not
have intellectual property rights to items that she makes while working
for the firm. Such agreements are controlling regardless of whether, in
their absence, a worker would be characterized as an employee or an independent contractor. Indeed, in copyright work-for-hire cases, the question
of whether a worker is an employee or an independent contractor arises
only after the court has determined that the parties did not agree on the
allocation of intellectual property rights . . . . [A] worker and a firm can
enter into a contract that explicitly delineates who holds intellectual property rights to worker-created items.
Nevertheless, such an agreement may only serve to vest the artist with ownership of the copyrighted work, and not legal authorship of such work — and,
as discussed above, the availability of statutory termination rights depends
on the latter rather than the former.157 Specifically, if the loan-out employer
is deemed the “author” of a work created in the course and scope of an
artist’s employ, such work may not be terminable even if the employer and
employee agree that copyright ownership will vest in the employee.
155
See, e.g., Welles v. Columbia Broad. Sys., Inc., 308 F.2d 810 (9th Cir. 1962);
May v. Morganelli-Heumann & Assocs., 618 F.2d 1363 (9th Cir. 1980). Indeed,
under the 1909 Act, employers and employees could enter into even more particular
agreements governing copyright ownership — for instance, by agreeing that the
copyright in all works prepared by the employee during the course of the employment relationship (whether or not within the scope of employment) belonged to the
employer. See Nimmer & Nimmer, supra note 36, § 5.03 [B][1][b][i], at 5–33
(“The parties may expressly agree that the employee shall be deemed to own the
copyright in all works produced in the employment relationship. Likewise, the
parties may expressly agree that all works produced by the employee during the
period of the employment relationship shall belong entirely to the employer.”).
This result, however, would not obtain under the 1976 Act, under which a work
prepared by an employee must be prepared within the “scope of his or her employment” to be considered a work for hire, unless the work falls within one of the
specifically enumerated categories of specially commissioned works and the parties
sign a writing evidencing an intent that the work be created for hire. See supra
Section II.C.2.
156
Eisenberg v. Advance Relocation & Storage, Inc., 237 F.3d 111, 116 (2d Cir.
2000). See also Iconix, Inc. v. Tokuda, 457 F. Supp. 2d 969, 994 (N.D. Cal. 2006).
157
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99
Where an employer and employee (or, under the appropriate circumstances under the 1909 Act, an independent contractor158) agree that the
copyright in a work created by an employee will be owned by that employee, the cases interpreting the 1909 and 1976 Acts are, at best, ambiguous as to whether such a work should be considered “for hire” from
inception. If such a work is “for hire” from inception, later transfers for that
work are not subject to termination, even if the parties agree that the copyright in the work would initially be owned by the employee. As disputes
regarding works for hire (and agreements contradicting the presumption of
the work for hire doctrine) have principally concerned themselves with ownership and control, and not with questions of authorship (as distinct from
ownership) and/or the often-distant prospects of statutory termination, we
are not aware of any case which confronts this issue directly. On the one
hand, certain courts and commentators have reasoned that the “works for
hire” doctrine “is based on the presumed mutual intent of the parties, and
does not operate as a matter of law.”159 On the other hand, the Second
Circuit’s decision and rationale in Marvel Characters suggests that a “work
for hire” exists in such a state from inception, regardless of any agreement or
characterization made by the parties — essentially, that such a work is, by
its very existential and unalterable nature, a “work for hire.”160 This interpretation finds support in Section 201(b) of the 1976 Act, which states:
In the case of a work made for hire, the employer or other person for whom
the work was prepared is considered the author for purposes of this title,
and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.161
158
Estate of Burne Hogarth v. Burroughs, 342 F.3d 149, 160, 163 (2d Cir.
2003) (holding that, as long as the “instance and expense” test was satisfied, there
was no “distinction in the case law under the 1909 Act between an employee and an
independent contractor” because “‘the purpose of the [1909 Act] is not to be frustrated by conceptualistic formulations of the employment [sic] relationship.’”) (citing Picture Music, Inc. v. Bourne, Inc., 457 F.2d 1213, 1217 (2d Cir. 1972)).
159
May, 618 F.2d at 1368–69 (“[I]n practice there was no question but that an
employer and employee might agree, and often did agree that the rights under the
copyright would remain in the employee (without any requirement of an assignment by employer to employee) subject to a right of the employer to be exclusively
licensed to use the work in particular media. The provision of former Sec. 26 . . .
must be read as creating a presumption of copyright in the employer which may be
rebutted only by a preponderance of evidence of a contrary agreement as between
the parties.”) (quoting Nimmer & Nimmer, supra note 36, § 5.03(D)).
160
161
17 U.S.C. § 201(b) (2006).
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This language, including the use of the conjunction “and” to separate two
evidently disparate statements, implies a separation between the concepts of
copyright ownership and copyright authorship and suggests that parties may
contract only around default rules of the former, not the latter.
If an employee and employer are not permitted to legally agree that a
work created in the course and scope of employment is authored (as opposed
to owned) by the employee, they will need to employ even more idiosyncratic contractual devices to preserve termination rights. For example, the
employment agreement between an artist and his loan-out could specify that
the creation of copyrighted works is expressly outside the scope of the artist’s employment, and therefore would not be deemed “authored” by the
loan-out employer. However, such a loan-out arrangement would likely be
viewed with intense skepticism by the taxing authorities when, as in the
case of a professional writer, the artist’s entire career normally involves the
creation of copyrighted works.162 Indeed, if such an artist does not transfer
ownership of his copyrighted works to the loan-out, it is difficult to express
what service the artist actually renders, or benefit the artist actually provides, to justify the salary that artist draws from his or her so-called
“employer.”163
3. Contractual Reservation of Termination Rights
Finally, an artist who wishes to make a last-ditch attempt to preserve
his or her termination rights might simply seek to do so via express contractual reservation, either as between the artist and his or her loan-out corporation, or as between the loan-out corporation and the purchaser. In practice,
however, this too is unlikely to resolve the issue in artists’ favor.
In the first place, the notion of “contractual reservation of statutory
termination rights” is a non sequitur in this context. Termination rights
are created — or not created — by the terms of Copyright Act.164 If a work
162
See supra Sections III.A–III.B.
Nor does this concern vanish if the artist prevails in the legal argument that
the contractual reservation of copyright between employee and employer affects authorship as well as ownership. The rather byzantine structure that would arise out
of such an arrangement — by which the artist effectively transfers copyright ownership from the loan-out to him or herself (by contradicting the legal presumption of
work-for-hire status) but immediately assigns the same copyright back to the loanout — seems likely, in its own right, to draw the scrutiny and ire of already wary
tax authorities.
164
17 U.S.C. § 304 (2006). See also Penguin Group (USA) Inc. v. Steinbeck,
537 F.3d 193, 202–04 (2d Cir. 2008) (discussing provisions of the Copyright Act
163
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101
created and sold via a loan-out corporation is a work for hire from inception,
copyright termination rights are simply never created, and therefore, there is
nothing to reserve. Consequently, an artist cannot actually “save” his or her
statutory termination rights by contractual reservation, but can only hope to
create contractual termination rights which (presumably) would operate on
the same terms.
Moreover, any enterprising attorney who includes such a provision in
an agreement between a client’s loan-out and purchasing entity is unlikely
to get very far. The business realities of the entertainment industry are such
that, in all but the most extreme and unique cases, producers and other
buyers extract for themselves maximum rights with minimum limitations.165 Indeed, it was the tendency of the industry to, virtually monolithically, make such all-encompassing demands that compelled Congress to
make statutory termination rights (unlike copyright renewal terms under
the 1909 Act) inalienable by contract or otherwise.166 It is, in short, virtually impossible to imagine that producers would actually accept any effort
by artists or their lawyers to create for themselves contractual termination
rights to replace their undermined statutory rights.
Nor can artists avoid the resistance of buyers by burying contractual
termination provisions in their agreements with their own loan-out corporations (which are typically not directly scrutinized by producers or other
purchasing entities). In practice, any customary option or sale of intellectual
property rights inevitably requires the seller to make a variety of representations and warranties, including that the seller has the rights it purports to
grant, that those rights are unencumbered, and that the seller has not done
and will not do anything to undermine the grant of rights to the purchasing
entity. Where the seller is a loan-out corporation, these representations and
warranties are typically subject to a personal guarantee by the artist himself.
Any effort by an artist to terminate the rights of a producer by exercising
contractual termination rights stealthily incorporated into the employment
agreement between the artist and his or her own loan-out corporation will
which explicitly contemplate both the creation and the loss of statutory termination
rights).
165
For instance, an option or sale of motion picture and television rights in an
existing property, such as a novel, is typically drafted not as an assignment of solely
those motion picture/television rights (as well as customary allied and ancillary
rights), but rather, as an assignment of the entire copyright interest and all underlying rights, subject only to the reservation of certain specifically enumerated categories of rights (such as publishing, author-written sequels, and, in some cases, rights
in stage or other media).
166
See supra Section II.A.
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be inevitably and promptly met with a lawsuit from the producer for breach
of those representations and warranties. Further, the damages suffered by
the producer as a result of such a breach will be precisely the value of the
work reclaimed by the terminating artist.
VI. CONCLUSION
The complex and surprising interaction between the 1976 Copyright
Act’s copyright termination provisions, on the one hand, and the widespread
use of loan-out corporations, on the other hand, is a ticking time bomb for
copyright-intensive industries whose timer is about to hit zero. Although,
as explained in this article, there is a dearth of legal authority on many of
the key issues in this arena, as more and more copyright termination notices
are issued under the 1976 Act in the years to come, that vacuum is unlikely
to remain in place. Yet the conflict between copyright termination rights
and loan-out corporations is not simply an academic question — rather, it is
a reminder that, where social policy and business reality intersect, legal abstractions can collide head-on with very real rights. Ultimately, while creative lawyers have a number of arguments available to them in hopes of
avoiding the draconian unintended consequences of their longstanding advocacy of loan-out corporations, it is clear that only disciplined, targeted reform will suffice to truly reconcile the practices of the modern
entertainment industry with the policies enshrined in the Copyright Act. In
short, a legislative solution is the most straightforward and practical method
of ensuring that termination rights are not inadvertently lost, while at the
same time recognizing the legitimate expectations of the parties to true
work-for-hire relationships, to whom these termination rights were never
intended to apply.
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How the Expressive Power of Title IX
Dilutes Its Promise
Dionne L. Koller1
ABSTRACT
Title IX is widely credited with shaping new norms for the world of
sports by requiring educational institutions to provide equal athletic opportunities to women. The statute and regulations send a message that women
are entitled to participate in sports on terms equal to men. For several decades, this message of equality produced dramatic results in participation
rates, as the number of women interested in athletics grew substantially.
Despite these gains, however, many women and girls, especially those of
color and lower socio-economic status, still do not participate in sports, or
remain interested in participating, in numbers comparable to their male
counterparts. Indeed, in recent years the gains in participation rates
brought about by Title IX seemingly have leveled off while the childhood
obesity crisis, especially among girls, has grown. Title IX scholarship and
popular advocacy efforts often focus on greater Title IX enforcement as the
way to continue attracting women and girls to participate in competitive
sports.
This Article examines whether greater enforcement of Title IX’s equality mandate is the answer, by looking at the signals the statute and regulations send to prospective female athletes. In doing so, this Article explains
that a key feature of Title IX theory is that discrimination in the form of
fewer opportunities for women as compared to men, as well as sub-par conditions for participation, “sends a message” to girls that discourages them
1
Associate Professor of Law and Director, Center for Sport and the Law,
University of Baltimore School of Law. Thanks to Kimberly Brown, Margaret
Johnson and Michael Meyerson for comments on earlier drafts of this article. Ellen
Spielman provided helpful assistance with research.
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from participating. This negative message is the prevailing explanation for
why women still do not participate in sports at rates comparable to men.
Implicit in this argument is that strong Title IX enforcement can produce
the opposite result, continuing to signal that women are entitled to participate in sports on terms equal to men, and that such a positive message will
stimulate interest in participation. This Article seeks to push beyond such
assumptions to examine with more nuance how Title IX speaks to women
about sports and how the law’s expressive content affects women’s interest in
pa+rticipating. Using the expressive theory of the law, this Article takes
the position that Title IX powerfully “speaks” beyond its remedies, and the
message today is much more complex than that of simply empowering women through a message of equality. Instead, this article asserts that Title IX
in fact sends a mixed message, communicating both that women and girls
are entitled to participate in athletics under the same conditions as their
male counterparts, but also that such participation opportunities are within
a model for athletics that serves to exclude those who lack the interest, ability and/or resources to meet its demands. As a result, while Title IX communicates an empowering message that can in many cases stimulate
women’s interest in sports, it also sends a message that drives many more
women, especially those of color and lower socio-economic status, away.
TABLE
OF
CONTENTS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II. TITLE IX OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. The Statute and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Why Title IX is Important and How it Purports to Work .
III. TITLE IX AND THE EXPRESSIVE POWER OF THE LAW . . . . . . . . .
A. The Expressive Power of the Law . . . . . . . . . . . . . . . . . . . . . .
B. The Expressive Power of Title IX . . . . . . . . . . . . . . . . . . . . .
1. Title IX’s First Message: Equality, Empowerment
and Entitlement to Participate . . . . . . . . . . . . . . . . .
2. Title IX’s Second Message: The Exclusive
Conception of Who Can Be an Athlete . . . . . . . . .
a. The Model for Sport in Educational Institutions .
b. How the Model Can Become Title IX’s Message .
1. The Rhetoric of Athletic Achievement in
Title IX Cases . . . . . . . . . . . . . . . . . . . . . . . .
2. The Rhetoric of Athletic Achievement
and Title IX by Government Officials . .
105
109
109
112
119
120
122
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124
R
131
132
137
R
139
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144
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2012 / How the Expressive Power of Title IX Dilutes Its Promise
How Title IX’s Expressive Content Shapes Norms
for Sports Participation . . . . . . . . . . . . . . . . . . . . . .
IV. POTENTIAL SOLUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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c.
146
152
157
I. INTRODUCTION
Recently, I taught a class on Title IX2 to students in a Law and Feminism course. In preparation, I imagined that I need not spend much time
on the benefits of Title IX or its justifications, as I often do when I teach
Title IX in other courses. I concluded, incorrectly and perhaps in hindsight
unfairly, that the women in Law and Feminism would not need to be “sold”
on Title IX. I was wrong. In reading the reflection essays I assigned to
gauge the students’ understanding of the readings, I was alarmed at how
many women saw Title IX in a negative light. It wasn’t that they believed
that Title IX unfairly hurt men — a common critique of Title IX opponents
— it was that among these largely twenty-something women, Title IX offered nothing for them. Specifically, the women wrote about resentment at
being pushed to excel in sports and the perception that competitive sports
were only for those who were uniquely talented. Some discussed having
little or no access to sports that gained popularity post-Title IX, such as
soccer, lacrosse and softball. Only the woman in class who was old enough
to remember that growing up in her Midwestern town, women’s basketball
was a half-court game, found Title IX to be an important topic. The rest
were quite skeptical of its inclusion as a topic in the class, as for them, Title
IX was largely irrelevant.
Of course, not every woman thinks so. Since its enactment in 1972,
Title IX’s ability to change the culture surrounding women’s participation
in athletics and bring steadily-increasing numbers of women into sports has
been dramatic.3 Courts have consistently upheld Title IX’s mandates,4 and
statistics have demonstrated powerfully that creating opportunities for girls
and women in athletics inspires them to participate. Before Title IX, fewer
2
20 U.S.C. §§ 1681–1688 (2006).
Deborah Brake, The Struggle for Sex Equality in Sport and the Theory Behind Title
IX, 34 U. Mich. J.L. Reform 13, 16–18 (2001).
4
See Equity in Athletics, Inc. v. Dep’t of Educ., 504 F. Supp. 2d 88, 102 (W.D.
Va. 2007).
3
R
R
R
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than 32,000 women participated in intercollegiate athletics.5 Now, there
are more than 174,000 female intercollegiate athletes.6 Female participation
in interscholastic athletics has grown by more than 920%,7 with about
294,000 girls participating in high school athletics in 1971, and over 3
million in 2007-2008.8 Yet despite more than three decades of growth in
women’s participation in sports, it seems that Title IX has not continued to
have the wide-ranging impact on women’s sports participation that would
produce equivalent participation rates to men. Social science research shows
that while large numbers of girls participate in sports during the elementary
and middle school years, many stop participating in adolescence.9 Perhaps
most troubling, many more girls and women do not participate at all.10
This is especially true for girls and women of color and those from disadvantaged socio-economic backgrounds.11 For women and girls with disabilities,
5
Jocelyn Samuels, Reviewing the Play: How Faulty Premises Affected the Work of the
Commission on Opportunity in Athletics and Why Title IX Protections are Still Needed to
Ensure Equal Opportunity in Athletics, 3 Margins 233, 242 (2003).
6
Denise M. DeHass, NCAA, Participation: 1981–82–2006–07 NCAA
Sports Sponsorship and Participation Rates Report 61 (2008), available at http:/
/www.ncaapublications.com/p-4124-participation-rates-1981-82-2006-07-ncaasports-sponsorship-and-participation-rates-report.aspx.
7
See Samuels, supra note 5, at 242; Nat’l Fed’n of State High Sch. Ass’ns,
2007–2008 High School Athletics Participation Survey 48 (n.d.), available at
http://www.nfhs.org/content.aspx?id=3282.
8
Nat’l Fed’n of State High Sch. Ass’ns, supra note 7, at 48.
9
Don Sabo & Phil Veliz, Women’s Sports Foundation, Go Out and Play:
Youth Sports in America 128 (2008), available at http://www.womenssportsfoundation.org/home/research/articles-and-reports/mental-and-physical-health/go-out-andplay.
10
Id. at 133; see also B. Glenn George, Forfeit: Opportunity, Choice, and Discrimination Theory Under Title IX, 22 Yale J.L. & Feminism 1, 3 (2010); Nat’l Coal. For
Women and Girls in Educ., Title IX at 35: Beyond the Headlines 10 (2008),
available at http://ncwge.org/PDF/TitleIXat35.pdf.
11
Angelina KewalRamani et al., Nat’l Ctr. for Educ. Statistics, Status
and Trends in Education of Racial and Ethnic Minorities 92 (2007), available
at http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2007039 (“White females
were more likely to participate in interscholastic sports (51 percent) than were females of any other race/ethnicity, while Black females (40 percent) were more likely
than Hispanic (32 percent) or Asian/Pacific Islander females (34 percent) to take
part in these sports.”); Matthew J. Taylor et al., The Impact of Sports Participation on
Violence and Victimization among Rural Minority Adolescent Girls, 19 Women Sport &
Physical Activity J., Spring 2010, at 3, 7 (In this study, 50.6% of white girls, 30.4%
of African American girls, and 36.5% of Hispanic girls participated in structured
sports in and outside of school); Will J. Jordan, Black High School Students’ Participation in School-Sponsored Sports Activities: Effects on School Engagement and Achievement, 68
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107
sports opportunities are almost non-existent.12 For all of these women and
girls, as it was for most of the students in my class, Title IX seemingly is
more irrelevant than empowering.
Title IX discourse focuses on discrimination against female athletes as
the reason why women still do not show an interest in sports participation at
the same rate as men.13 As a result, many Title IX supporters assert that the
remedy for women’s persistent lack of participation in sports is greater Title
IX enforcement. They particularly emphasize proportional representation of
women in college athletic programs and upgrades to athletic offerings and
facilities that will “send a message” that women’s athletics are as valued as
men’s.14 This is, without question, important to achieving equality for
those women who choose to participate in sports, and that work is certainly
far from done. However, in my previous work, I examined whether Title
J. Negro Educ. 54, 60 (showing similarly-tiered White, African American, and Hispanic participation rates for both males and females); Minda Monteagudo, Why Too
Few Hispanic Girls Play Sports — and What To Do About It, Fair Game News (June
3, 2010, 5:56 AM), http://fairgamenews.com/2010/06/why-hispanic-girls-rarelyplay-sports-and-what-to-do-about-it/ (“According to the NCAA, Hispanic females
make up just 3.9 percent of college athletes (Hispanics are more than 8 percent of
college enrollments).”); Jeffrey Owings et al., Nat’l Ctr. for Educ. Statistics, Who Reports Participation in Varsity Intercollegiate Sports at 4Year Colleges? 2-3 (Dec. 1996), available at http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=97911 (“Among members of the 8th-grade class of 1988 . . .
High socio-economic status (SES) students were 10 times as likely to report participation at Division I schools as were low SES students (5.0 percent compared to 0.5
percent). Black students were just as likely as white students to report participation
in intercollegiate sports at Division I schools (2.5 percent for blacks and 2.3 percent
for whites). Among the high school graduates from the 8th-grade class of 1988 . . .
Three out of each 10 (30.4 percent) elite high school varsity athletes from advantaged backgrounds (high SES) reported participation in intercollegiate sports at
4-year colleges. Among elite high school varsity athletes, those from more advantaged backgrounds . . . were 3.5 times more likely to report intercollegiate athletic participation at NCAA Division I schools as were those from less advantaged
backgrounds . . . 14.7 percent as compared to 4.1 percent.” Examining intercollegiate athletic participation by SES reveals “5.0 percent of high SES cohort members
reported participation [in intercollegiate athletics] as compared to 1.5 percent for
middle SES and 0.5 percent for low SES 8th-grade students . . . High SES students
were 10 times as likely to report participation in intercollegiate athletics as were
low SES students.”).
12
Nat’l Coal. For Women and Girls in Educ., supra note 10, at 11.
13
Id. at 2–3.
14
Id. at 7 (stating that “improved enforcement of Title IX and diligent efforts
to advance women and girls in sports are still necessary to achieve truly equal opportunity on the playing fields”).
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IX’s conception of equality was up to the task of continuing to generate
women’s interest in sports participation. I concluded that in many cases,
Title IX could not effectuate what is thought to be its full promise because
its anti-discrimination mandate requires girls and women to assimilate into
a model for sports that was developed and is administered primarily by and
for men.15 The result, I argued, was an “interest paradox,” whereby Title
IX served to extinguish interest in sports participation among the very population it was meant to serve.16
This Article takes the discussion one step further by explaining how
the interest paradox takes shape. Using the expressive theory of law, this
article explains that Title IX has a significant expressive dimension beyond
its sanctions, so that the statute, regulations and cases interpreting them
communicate with girls and women in a way that shapes norms for sports
participation. While it is widely believed that Title IX signals to females
that they are entitled to and should participate in athletics, in fact its expressive meaning amounts to a mixed message. This Article asserts that by
deferring to educational institutions to define the content of their sports
programs — as long as opportunities for women are equivalent to those for
men — participation opportunities created in the name of Title IX send a
second signal to girls and women that dilutes the law’s empowering message. Shaped by the socio-economic context of the varieties of women who
might participate in sports, this message is that there is an exclusive, and for
many women unattainable, conception of who a student-athlete can be.
This message, like the signals sent by gender discrimination, contributes to
discouraging many women and girls from participating in sports.
Part I of this article provides a brief overview of Title IX and its theoretical underpinnings which assume that creating opportunities for women
to be student-athletes in the current model for education-based sports programs will encourage more women to participate. Part II seeks to explain
how Title IX’s expressive dimension sends a dual message to females about
sports participation. This part asserts that while an important and enduring
message sent by Title IX is that women are entitled to participate in sports
on terms equal to men, Title IX also powerfully communicates the social
construction of who a qualified student-athlete is. This part explains how
this dual message can contribute to an “interest paradox,” so that opportunities created in the name of Title IX actually can serve to discourage participation in sports by those the law should inspire. Part III offers suggestions
15
Dionne L. Koller, Not Just One of the Boys: A Post-Feminist Critique of Title IX’s
Vision for Gender Equity in Sports, 43 Conn. L. Rev. 401, 439-40 (2010).
16
Id.
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109
for a new sport policy that can help shape new norms for education-based
sports programs and send a message that better aligns with the goal of gender equity in sports.
II. TITLE IX OVERVIEW
A. The Statute and Regulations
Congress enacted Title IX in 1972 to prohibit discrimination on the
basis of gender in all education programs receiving federal financial assistance.17 The purpose of the statute is to guarantee that all students have
equitable opportunities to participate in an educational program.18 Title IX
neither targets nor mentions athletics programs. The statute states quite
simply that “[n]o person in the United States shall, on the basis of sex, be
excluded from participation in, be denied the benefits of, or be subjected to
discrimination under any education program or activity receiving Federal
financial assistance . . . .”19 The statute itself does not detail the content of
an equitable education-based sports program. Indeed, the issue of discrimination against women in education-based athletics programs was only a brief
part of the congressional debates on Title IX.20 Efforts to limit Title IX’s
effect on athletic programs failed,21 and Congress subsequently directed the
Department of Health, Education, and Welfare22 to prepare regulations implementing Title IX, including in the area of “intercollegiate athletic activities.”23 These regulations provide the framework for gender equity in
sports. The final regulations, which went into effect in 1975, provide that:
17
Gayle I. Horwitz, Athletics, 5 Geo. J. Gender & L. 311, 312-13 (2004).
Letter from Norma V. Cantú, Assistant Sec’y for Civil Rights, Dep’t of Educ.,
to Nancy S. Footer, General Counsel, Bowling Green State Univ. (Jul. 23, 1998),
available at http://www2.ed.gov/about/offices/list/ocr/docs/bowlgrn.html.
19
20 U.S.C. § 1681(a) (2006).
20
McCormick v. Sch. Dist. of Mamaroneck, 370 F.3d 275, 286 (2d Cir. 2004)
(citing 117 Cong. Rec. 30,407 (1971) (statement of Sen. Birch Bayh)); 118 Cong.
Rec. 5807 (1972) (statement of Sen. Birch Bayh).
21
For instance, Senator Tower attempted to limit the coverage of Title IX to
non-revenue producing sports. 120 Cong. Rec. 15,322–23 (1974) (statement of
Sen. Tower).
22
In 1979, the Department of Health, Education, and Welfare split into the
Department of Education, which now has the authority to enforce Title IX, and the
Department of Health and Human Services. See 20 U.S.C. §§ 3401–3510 (2006).
23
Education Amendments of 1974, Pub. L. No. 93–380, § 844, 88 Stat. 484,
612 (1974).
18
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No person shall, on the basis of sex, be excluded from participation in,
be denied the benefits of, be treated differently from another person or otherwise be discriminated against in any interscholastic, intercollegiate, club
or intramural athletics offered by a recipient . . . .24
Title IX does not require that covered educational programs give preferential treatment to women.25 Instead, Title IX requires entities that receive federal financial assistance to “provide equal athletic opportunity
for . . . both sexes.”26 This does not require educational institutions to have
gender-integrated sports teams or the same teams for men and women.
However, where a school has separate programs for men and women, Title
IX requires that those separate opportunities be equitable.27
To determine whether a school provides equal athletic opportunity, the
regulations state that it must be determined “whether the selection of sports
and levels of competition effectively accommodate the interests and abilities
of members of both sexes.”28 In 1979, the Department of Health, Educa24
34 C.F.R. § 106.41(a) (2011).
Nat’l Wrestling Coaches Ass’n v. U.S. Dep’t of Educ., 263 F. Supp. 2d 82, 95
(D.D.C. 2003); Pederson v. La. State Univ., 912 F. Supp. 892, 908 (D. La. 1996)
(“After establishing that sex discrimination is prohibited, Title IX then proceeds to
clarify that efforts to remedy historical sex discrimination shall not include preferential or disparate treatment of one sex over another.”); Neal v. Bd. of Trs., 198 F.3d
763, 771 (9th Cir. 1999) (“After all, § 1681(b) states that Title IX does not require
any education institution to grant preferential or disparate treatment to the members of one sex on account of an imbalance which may exist with respect to the total
number or percentage of persons of that sex participating in or receiving the benefits of any federally supported program or activity . . . .”); Cohen v. Brown Univ.,
101 F.3d 155, 164 (1st Cir. 1996) (“Title IX also specifies that its prohibition
against gender discrimination shall not be interpreted to require any educational
institution to grant preferential or disparate treatment to the members of one sex on
account of an imbalance which may exist between the total number or percentage of
persons of that sex participating in any federally supported program or activity, and
the total number or percentage of persons of that sex in any community, State,
section, or other area.”) (internal quotation marks omitted).
26
34 C.F.R. § 106.41(c).
27
Cantú, supra note 18.
28
34 C.F.R. § 106.41(c). The regulations list ten factors to consider in determining whether equal opportunities exist: “(1) Whether the selection of sports and
levels of competition effectively accommodate the interests and abilities of members
of both sexes; (2) The provision of equipment and supplies; (3) Scheduling of games
and practice time; (4) Travel and per diem allowance; (5) Opportunity to receive
coaching and academic tutoring; (6) Assignment and compensation of coaches and
tutors; (7) Provision of locker rooms, practice and competitive facilities; (8) Provision of medical training facilities and services; (9) Provision of housing and dining
facilities and services; (10) Publicity.” Id.
25
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111
tion and Welfare issued a Policy Interpretation which explained that, for
purposes of athletics, Title IX compliance was measured in three areas that
directly impact the student-athlete experience: (1) athletic scholarships; (2)
other program areas (represented by factors two through ten as listed in the
regulations);29 and (3) accommodating the interests and abilities of male and
female students (derived from the first factor of the regulations).30
Effective accommodation of male and female students’ interests and
abilities in terms of participation opportunities is measured by compliance
with the well-known “three-part test,” outlined in the 1979 Policy Interpretation, which provides that an institution effectively accommodates the
interests and abilities of its male and female students if it meets any one of
three benchmarks:
(1) Whether intercollegiate level participation opportunities for male
and female students are provided in numbers substantially proportionate to their respective enrollments; or
(2) Where the members of one sex have been and are underrepresented
among intercollegiate athletes, whether the institution can show a history and continuing practice of program expansion which is demonstrably responsive to the developing interest and abilities of the
members of that sex; or
(3) Where members of one sex are underrepresented among intercollegiate athletes, and the institution cannot show a continuing practice of
program expansion . . . whether it can be demonstrated that the interests and abilities of the members of that sex have been fully and effectively accommodated by the present program.31
29
Policy Interpretation, 44 Fed. Reg. 71,413, 71,414 (Dec. 11, 1979) (noting
that “the governing principle” in determining compliance is that “male and female
athletes should receive equivalent treatment, benefits and opportunities.”)
30
Claims in this area are often referred to as “accommodation” claims and “relate to a school’s allocation of athletic participation opportunities between its female
and male students.” McCormick v. Sch. Dist. of Mamaroneck, 370 F.3d 275, 291
(2d Cir. 2004). Most cases have dealt with this area of compliance. Id.
31
Policy Interpretation, 44 Fed. Reg. at 71,418. In 1996, the Department of
Education issued a Policy Clarification which explained that the first prong of the
test is a “safe harbor” and not a requirement. Letter from Norma V. Cantú, Assistant Sec’y for Civil Rights, Dep’t of Educ., to Colleague (Jan. 16, 1996), available at
http://www2.ed.gov/about/offices/list/ocr/docs/clarific.html#two.
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Every court to consider the issue has held that the regulations and Policy
Interpretation are entitled to deference.32 Courts have stated that “the degree of deference is particularly high in Title IX cases because Congress
explicitly delegated to the agency the task of prescribing standards for athletic programs under Title IX.”33 Moreover, every court to consider the
issue has held that the regulations and Policy Interpretation are constitutional.34 Importantly, however, while the equality mandate itself has been
defined through interpretations of Title IX and its implementing regulations and policy clarifications, the content of the equality mandate is left to
be defined by the institutions sponsoring athletic programs.35
As explained in Part II below, because Title IX case law and regulations defer to institutions to shape their athletic programs, the definition of
an athlete deserving of equal athletic opportunity is given meaning not by
the law, through Title IX, but by the institutions subject to Title IX. This
meaning is subsequently communicated to prospective female athletes in a
variety of ways. The method this Article is concerned with is how Title IX
incorporates the social construction of an athlete entitled to equal athletic
opportunity and sends a message that can shape norms for women’s sports
participation and, as a result, women’s interest in participating.
B. Why Title IX is Important and How it Purports to Work
Title IX’s goals are said to be two-fold. First, the statute and regulations seek to guarantee equal athletic opportunity for women and girls currently participating in education-based sports programs. The second goal is
to send a message through equal athletic opportunity to prospective female
athletes, on the theory that providing gender equity in athletics will develop
32
McCormick, 370 F.3d at 290; Miami Univ. Wrestling Club v. Miami Univ.,
302 F.3d 608, 615 (6th Cir. 2002); Chalenor v. Univ. of N.D., 291 F.3d 1042,
1047 (8th Cir. 2002); Horner v. Ky. High Sch. Athletic Ass’n, 43 F.3d 265, 273
(6th Cir. 1994); Kelley v. Bd. of Trs., 35 F.3d 265, 270 (7th Cir. 1994); Roberts v.
Colo. State Bd. of Agric., 998 F.2d 824, 828 (10th Cir. 1993); Williams v. Sch.
Dist., 998 F.2d 168, 171 (3d Cir. 1993); Cohen v. Brown Univ., 991 F.2d 888,
896–97 (1st Cir. 1996); Equity in Athletics, Inc. v. Dep’t of Educ., 504 F. Supp. 2d
88, 102 (W.D. Va. 2007).
33
McCormick, 370 F.3d at 289 (internal citations omitted).
34
Equity in Athletics, Inc., 504 F. Supp. 2d at 102.
35
The Office of Civil Rights has explained that the three-part test allows institutions to “maintain flexibility and control over their athletic programs . . . .”
Letter from Russlyn Ali, Assistant Sec’y for Civil Rights, Dep’t of Educ., to Colleague (April 20, 2010), available at http://www2.ed.gov/about/offices/list/ocr/let
ters/colleague-20100420.pdf.
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women’s interest in participation. This has been called the “trickle down”
theory36 and it is assumed that in this way Title IX will not simply guarantee equality, but will also shape norms for sports participation in a way that
inspires women and girls to participate.37
Social scientists and scholars have long pointed out that equitably distributing education-based38 sports opportunities is important because sports
participation provides significant and well-documented lifetime benefits.39
As a result, the importance of Title IX and the urgency to provide gender
equity in sport is premised on the fact that participation in sports40 can
provide important life lessons and help develop significant life skills — lessons and skills that have long been enjoyed by males.41 Indeed, a substantial
body of literature documents the benefits of sport participation. For instance, sports participation is said to “help all young people learn important
lessons” such as discipline, teamwork, time management and leadership that
“further long-term personal growth, independence and well-being.”42
Studies have demonstrated that students who participate in high school
sports perform better academically and have an increased probability of at36
Wendy Olson, Beyond Title IX: Toward an Agenda for Women and Sports in the
1990’s, 3 Yale J.L. & Feminism 105, 116 (1991).
37
Brake, supra note 3.
38
Although sports participation occurs in many different settings, such as
through private clubs, AAU leagues and the like, it is sport in the educational
setting that has the greatest impact because high schools and colleges/universities
support most organized sports programs in the United States. It is this setting, of
course, to which Title IX applies because most high schools, colleges and universities receive the federal funding that is a condition precedent to application of the
statute.
39
Deborah Brake, Revisiting Title IX’s Feminist Legacy: Moving Beyond the ThreePart Test, 12 Am. U. J. Gender Soc. Pol’y & L. 453, 458 (2004).
40
Some scholars recently have begun to question whether this type of varsity,
competitive sports opportunities are necessary to provide these benefits. George,
supra note 10.
41
Jessica E. Jay, Women’s Participation in Sports: Four Feminist Perspectives, 7 Tex. J.
Women & L. 1, 1–2, 10–17 (1997) (describing a Nike advertisement in which girls on a
swing set ask boys to let them play so they can reap the benefits of athletics too;
discussing the documented benefits of athletics for women); Suzanne Sangree, Title
IX and the Contact Sports Exemption: Gender Stereotypes in a Civil Rights Statute, 32
Conn. L. Rev. 381, 444–45 (2000) (explaining that without equal athletic opportunity
women will “be dependent upon men for care and protection” and “will necessarily
be dominated by their physically more developed and stronger [male] mates”).
42
Deborah L. Brake & Verna L. Williams, The Heart of the Game: Putting Race
and Educational Equity at the Center of Title IX, 7 Va. Sports & Ent. L.J. 199, 235
(2008).
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tending college.43 Moreover, athletic participation is said to create numerous benefits for women and girls, including better physical and mental
health, higher self-esteem, a lower rate of depression, a more positive body
image, greater educational success, and stronger inter-personal skills.44 Research shows that physical activity reduces female risk of cardiovascular disease,45 and physically active women are less likely to get diseases such as
breast cancer.46 Research also shows that participation in athletics promotes
positive social behaviors, including better academic performance,47 lower
rates of smoking, drug use and pregnancy, and higher levels of self-esteem.
Sports participation also provides social benefits that are carried throughout
life,48 including a woman’s professional life.49 Given the growing numbers
43
Matthew J. Mitten & Timothy Davis, Athlete Eligibility Requirements and Legal
Protection of Sports Participation Opportunities, 8 Va. Sports & Ent. L.J. 71 (2008).
44
Samuels, supra note 5, at 242; Amateur Sports Act: Hearing Before the Subcomm. on
Consumer Affairs, Foreign Commerce, and Tourism of the S. Comm. on Commerce, Science,
and Transp., 104th Cong. 12 (1995) (statement of Norma Cantú, Assistant Secretary, Office for Civil Rights, Department of Education) (“[G]irls who participate in
sport are three times more likely to graduate from high school, 80 percent less
likely to have an unwanted pregnancy, and 92 percent less likely to use drugs”);
Marcia D. Greenberger & Neena K. Chaudhry, Worth Fighting For: Thirty-Five Years
of Title IX Advocacy in the Courts, Congress and the Federal Agencies, 55 Clev. St. L.
Rev. 491, 492 (2007) (explaining that “[f]emales who participate in athletics benefit from greater academic success, responsible social behaviors, a multitude of health
benefits, and increased personal skills” and noting that “[f]emale student-athletes
have higher grades, are less likely to drop out, and have higher graduation rates than
their non-athletic peers”).
45
Women’s Sports Found., Her Life Depends on It: Sport, Physical Activity and the Health and Well-Being of American Girls 8 (2004).
46
Id. at 9.
47
Id. at 30; see also Council on Sports Med. and Fitness and Council on Sch.
Health, Am. Acad. of Pediatrics, Active Healthy Living: Prevention of Childhood Obesity
Through Increased Healthy Living, 117 Pediatrics 1834, 1836 (2006) (discussing the
health benefits of athletics for all children from weight reduction, to insulin sensitivity, to blood pressure, to self-esteem); Cardiovascular Benefits of Daily Exercise in
School Children Are Evident Even After One Year, ScienceDaily, May 10, 2009, http:/
/www.sciencedaily.com/releases/2009/05/090508045318.htm.
48
Amateur Sports Act: Hearing Before the Subcomm. on Consumer Affairs, Foreign Commerce, and Tourism of the S. Comm. on Commerce, Science, and Transp., 104th Cong.
183–199 (1995) (statement of Donna A. Lopiano, Executive Director, Women’s
Sports Foundation) [hereinafter Amateur Sports Act: Hearings]; see Council on Sports
Med. and Fitness and Council on Sch. Health, Am. Acad. of Pediatrics, supra note
47.
49
Suzanne Sangree, Title IX and the Contact Sports Exemption: Gender Stereotypes in
a Civil Rights Statute, 32 Conn. L. Rev. 381, 444 (2000) (“80% of women identi-
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115
of children, and especially girls, who are overweight and suffering the resultant lifelong physical and emotional effects, sports participation — both
encouraging an interest in it and sustaining it — is an important public
policy issue.
Title IX addresses this issue by prohibiting discrimination on the basis
of gender in education-based sports programs. In doing so, scholars have
explained that Title IX goes beyond a formal equality approach to achieve a
kind of substantive equality as well,50 so that Title IX “take[s] an approach
to sex equality that is markedly different from the dominant approach reflected in sex discrimination law generally.”51 This is because, as courts and
scholars have long recognized, a purely formal equality interpretation of Title IX would achieve little, as differences between men’s and women’s interest in athletics are the result of discriminatory social relationships and
institutional practices that “construct” such differences.52 Historically, only
men had the opportunity to develop the interest and ability to participate in
sports. Women were conditioned not to seek athletic opportunities or participate in sports, and opportunities for them to do so were severely limited.53 As a result, the law had to account for the fact that women naturally
would not have the same interest and ability to engage in sports because of
significant past discrimination. Title IX is said to do so by taking a substantive equality approach. This approach is sometimes referred to as
fied as key leaders in Fortune 500 companies participated in sports during their
childhood and have self-identified as ‘tomboys.’ . . . Several studies describing the
glass ceiling in corporations conclude that women’s lack of competitive team sports
experience disadvantages them for career advancement.”)
50
David S. Cohen, Title IX: Beyond Equal Protection, 28 Harv. J.L. & Gender
217, 263 (2005) (stating that “Title IX, on the other hand, looks beyond formal
equality and reaches into the realm of substantive equality”); Katharine T. Bartlett,
Gender Law, 1 Duke J. Gender L. & Pol’y 1, 5 (1994) (noting that “some substantive equality advocates favor equal treatment in some situations and special accommodation in others, insisting, for example, on equal access for women to men’s
athletic teams, private clubs, and colleges, but on separate teams, clubs, and colleges
for women to meet their special needs”); Brake & Williams, supra note 42, at
212–213.
51
Brake, supra note 3, at 24.
52
Brake, supra note 3, at 28–29 (“Feminists working within both relational and
anti-subordination approaches have focused on how gender difference is socially constructed. One school of thought, particularly relevant for Title IX analysis, is
loosely identified as structuralism, or new structuralism . . . it analyzes differences
not as inherent, but as constructed through social relationships and institutional
practices.”)
53
Erin Buzuvis, Survey Says . . . A Critical Analysis of the New Title IX Policy and a
Proposal for Reform, 91 Iowa L. Rev. 821, 825 (2006).
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“structuralism,”54 or “structural equality,” and it is based on the notion
that women’s expressed “interest” in athletics cannot be weighted equally
with men’s because such “interest” might instead be the result of social
factors which discourage women’s athletic participation, rather than the result of real choices.55 Instead, the theory has been that changing the structure of athletics by creating opportunities for women to participate and
removing stigmas against such participation is what is needed to develop
women’s interest in sports.56
Title IX incorporates this substantive, or “structural,” approach to
equality primarily through the so-called “three-part test”57 for compliance.
Through the three-part test, schools are required to create opportunities for
girls and women to participate in sports to stimulate females’ interest in
participating.58 Title IX therefore does not require gender-neutral assessments of athletic ability, but instead allows institutions to offer separate
54
Brake, supra note 3, at 29–30 (writing that “a structuralist interpretation of
discrimination law centers the legal analysis on how institutions and organizations
construct sex difference and inequality”); Martha Chamallas, Introduction to
Feminist Legal Theory 64 (2003) (explaining that Title IX doctrine is “ “‘structuralist’” in orientation because the courts in these cases seem to appreciate the important role that the current structure of athletic programs and opportunities play in
creating interest among students to participate in sports”).
55
Brake, supra note 3, at 29–30 (“Structuralist approaches are reluctant to center
equality law around the equal valuation of women’s preferences when those preferences themselves may be the products of social constraint rather than authentic
choices.”).
56
Horwitz, supra note 17, at 314–15. As commentators have explained:
Any measure that purports to compare the interest of women and men
participating in sports will be affected by the present mix of opportunities
for men and women. For example, the answers given by high school students to questions about what college sports they want to participate in
will inevitably be affected by what sports they have had a chance to play in
high school. These answers, in turn, will have been influenced by their
opportunities for college athletic scholarships and the mix of sports offered
at the college level.
Deborah Brake & Elizabeth Catlin, The Path of Most Resistance: The Long Road Toward
Gender Equity in Intercollegiate Athletics, 3 Duke J. Gender L. & Pol’y 51, 79
(1996).
57
Brake, supra note 3, at 49–50.
58
Brake & Williams, supra note 42, at 213–14; Buzuvis, supra note 53, at 826;
Deborah L. Brake, Title IX as Pragmatic Feminism, 55 Clev. St. L. Rev. 513, 537
(2007).
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117
male and female teams.59 More than that, Title IX has a substantive equality element in that it does not require institutions to offer the same sports
for men and women and grants women greater rights to try out for a men’s
team (and is much more restrictive in allowing men to try out for a women’s
team) because of the history of discrimination against women in sports.60 As
a result, Title IX has been applauded for taking a “more comprehensive
view of equality” than the Equal Protection clause.61
Courts frequently have endorsed the “structural” equality elements of
Title IX,62 often citing the overwhelming statistics indicating that simply
creating opportunities for women to participate in sport has led to increased
interest.63 For instance, in the landmark case of Cohen v. Brown University,
the court stated that
To assert that Title IX permits institutions to provide fewer athletics participation opportunities for women than for men, based upon the premise
that women are less interested in sports than are men, is . . . to ignore the
fact that Title IX was enacted to remedy discrimination that results from
stereotyped notions of women’s interests and abilities.64
The court in Brown went on to explain that women’s lower rate of participation in sports resulted not from an inherent lack of interest, but because
historically, opportunities for such participation have been limited.65 Other
59
Deborah L. Brake, Getting in the Game: Title IX and the Women’s
Sports Revolution 15 (2010).
60
Id at 42.
61
Cohen, supra note 50, at 260.
62
Brake, supra note 3, at 50–51; Buzuvis, supra note 53, at 825 (explaining that
the Department of Education’s Office of Civil Rights and courts “have recognized
that social structures, including colleges and universities, have constructed women’s
interests in sports”).
63
McCormick v. Sch. Dist. of Mamaroneck, 370 F.3d 275, 286 (2d Cir. 2004)
(“The participation of girls and women in high school and college sports has increased dramatically since Title IX was enacted. In 1971, before Congress enacted
the statute, approximately 300,000 girls and 3.67 million boys played competitive
high school sports nationwide. In 2002, 2.86 million girls and 3.99 million boys
played competitive high school sports nationwide.”); Boucher v. Syracuse Univ.,
164 F.3d 113, 119 (2d Cir. 1999) (“Statistics show that by 1992, in comparison to
when Title IX was enacted, the number of young women participating in sports had
multiplied six times.”)
64
Cohen v. Brown Univ., 101 F.3d 155, 178–79 (1st Cir. 1996).
65
Id. at 179.
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courts have endorsed this view.66 Thus, courts, scholars, and Title IX advocates have emphasized that Title IX works to eliminate gender discrimination by providing women the opportunity to participate in athletics and
thereby generating interest in athletic participation. I have argued previously that, while necessary, Title IX’s equality mandate is limited in its
effectiveness in stimulating females’ interest in athletic participation, as it
guarantees women the right merely to assimilate into a male model of
sport.67 The following section of this article extends this analysis by explor66
For instance, the court in Pederson v. Louisiana State University echoed these
themes, stating that:
[LSU] argues brazenly that the evidence did not indicate sufficient interest
and ability in fast-pitch softball at LSU . . . The heart of this contention is
that an institution with no coach, no facilities, no varsity teams, no scholarships, and no recruiting in a given sport must have on campus enough
national-caliber athletes to field a competitive varsity team before a court
can find [a Title IX violation].
213 F.3d 858, 878 (5th Cir. 2000). In Neal v. Board of Trustees of the California State
Universities, the court similarly discounted assertions that women were not as interested as men, stating that:
[A] central aspect of Title IX’s purpose was to encourage women to participate in sports: The increased roster spots and scholarships reserved for women would gradually increase demand among women for those roster spots
and scholarships . . .Title IX has altered women’s preferences, making
them more interested in sports, and more likely to become student
athletes.
198 F.3d 763, 769 (9th Cir. 1999). The court further explained:
[M]en’s expressed interest in participating in varsity sports is apparently
higher than women’s at the present time — although the “interest gap”
continues to narrow — so permitting gender-conscious remedies until the
proportions of students and athletes are roughly proportional gives universities more remedial freedom than permitting remedies only until expressed interest and varsity roster spots correspond.
Id. at 767; see also Roberts v. Colo. State Univ., 814 F. Supp. 1507, 1514 (D. Colo.
1993) (“Acceptance [of Colorado’s] argument also would implicitly condone the
attitude that female athletes at CSU should be satisfied with their current opportunities given the pre-1970 lack of participation opportunities for women in intercollegiate athletics.”). Moreover, in testimony before Congress, one college athletic
administrator stated that “[a]fter Title IX was passed, and opportunities became
available, women’s participation skyrocketed. If we have learned anything from this
experience, it is that women are interested in playing sports and that interest expands as opportunities expand . . .” Amateur Sports Act: Hearing Before the Subcomm.
on Consumer Affairs, Foreign Commerce, and Tourism of the S. Comm. on Commerce, Science,
and Transp., 104th Cong. 201 (1995) (statement of Peggy Bradley Doppes, Nat’l
Ass’n of Collegiate, Women Athletic Adm’rs).
67
Koller, supra note 15.
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119
ing how Title IX’s equality framework communicates with or “sends a message” to women in a way that can affect their interest in sports participation.
III. TITLE IX AND
THE
EXPRESSIVE POWER
OF THE
LAW
Title IX’s ability to continue to effect change in female athletic participation rates can be evaluated by looking at its theoretical foundation combined with its expressive effects. Expressive theories of the law focus on the
“statements” made by the law and how those statements might affect social
norms.68 Indeed, a significant amount of Title IX’s legal and popular discourse is focused on the messages sent to women and girls about sports
participation. Understanding fully the ways in which Title IX can send
messages to girls and women about sports is therefore crucial to appreciating
the ways in which the law can stimulate interest in participating, or not, in
sports. Accordingly, since the premise behind Title IX’s theory of structural
equality is that increased participation opportunities will encourage females
to take up and continue engaging in sports, it is important to examine what
and how opportunities created in the name of Title IX communicate with
women to determine whether the law’s message is consistent with its goals.
While examining Title IX’s expressive dimension, it is important to
note that the law in general, and Title IX in particular, is of course only one
influence on girls’ and women’s interest in sports. Therefore, it might be
suggested that other factors are at work which encourage, or discourage,
participation in sports. This is certainly true,69 and it would be a mistake
to assume that the law has the sole effect on women’s motivation to participate in sports. However, it is still important to look at the law’s role in
shaping women’s interest in sports for two reasons. First, Title IX historically has had a significant impact on women’s participation, and its status in
popular culture has carried an important message that, statistics clearly
demonstrate, can affect women’s interest in sports. Second, given that Title
IX has always strongly communicated that women are entitled to participate
in sports, it is important to explore whether a message of equality and entitlement to participate is still sufficient to actually develop the interest in
participating, and if not, what role might the law play in stimulating even
more broad-based interest.
In this respect, an examination of Title IX’s message to prospective
female athletes is a useful exercise, not just theoretically but practically. As
68
Cass R. Sunstein, On the Expressive Function of Law, 144 U. Pa. L. Rev. 2021,
2024–25 (1995).
69
George, supra note 10, at 25–29.
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will be explained below, such an examination reveals that Title IX now
signals two different, and likely for many potential female athletes, conflicting messages. The first and most prominent is that girls and women can,
should, and are entitled to participate in athletics on a basis equal to boys
and men. The second and less-examined message is that such participation
opportunities are contingent upon meeting the demands of the socially-constructed model for sports that dominates in our educational institutions, and
serves to exclude many. As new generations of women grow up knowing
they are legally entitled to participate in sports, it is this second message
that takes on greater significance in shaping women’s desire to participate in
sports.
A. The Expressive Power of the Law
Scholars have explained that “there can be no doubt that law, like action in general, has an expressive function” and that its expressive dimension goes beyond its coercive effects.70 Thus, the expressive theory of the
law “focuses on what law says rather than the sanctions law threatens.”71
Law is said to create public meanings and shared understandings between
the government and public.72 As a result, many scholars have explained that
the law has the power to shape social norms73 and influence behavior.74
70
Cass R. Sunstein, Law, Economics and Norms: In the Expressive Function of Law,
144 U. Pa. L. Rev. 2021, 2051 (1996) (“Many debates over the appropriate content
of law are really debates over the statement that law makes, independent of its
(direct) consequences.”); see also Elizabeth S. Anderson & Richard H. Pildes, Expressive Theories of Law: A General Restatement, 148 U. Pa. L. Rev. 1503 (2000); Richard
H. McAdams, An Attitudinal Theory of Expressive Law, 79 Or. L. Rev. 339, 339
(2000) (“Legal theorists sometimes posit that law affects behavior ‘expressively’ by
what it says rather than by what it does.”); Alex Geisinger, A Belief Change Theory of
Expressive Law, 88 Iowa L. Rev. 35, 37 (2002).
71
Richard H. McAdams, The Expressive Power of Adjudication, 2005 U. Ill. L.
Rev. 1043, 1046 (2005).
72
Anderson & Pildes, supra note 70, at 1571.
73
As Richard McAdams has stated:
“The expressive effect thus gives law a significant potential for managing
norms. One of the necessary conditions of a norm is that people generally
realize that others will, at the least, approve or disapprove of them for
engaging in certain conduct. Where the approval pattern is not well
known, a legislative proclamation can publicize it and create a norm. Even
where the approval pattern is already known and the norm exists, legislation can still strengthen the norm by causing individuals to adjust upward
their beliefs about the strength of the consensus underlying the norm . . .
[T]hose who observe the signal will update their prior beliefs about public
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However, expressive meanings are not determined in isolation, but are “socially constructed,” so that the meanings are given shape by the other
norms, practices and understandings in a particular community.75
For instance, law has the ability to communicate important value judgments76 and can serve to educate individuals about socially preferred or
harmful behavior. Law then may cause individuals to change their behavior
by “signaling the underlying attitudes of a community or society.”77 Because people are motivated to gain approval and avoid disapproval, the information signaled by legislation and other law can cause individuals to change
their behavior to conform with popular norms.78 Court decisions also have
an expressive effect, because they, too “often reflect public attitudes.”79 Accordingly, because individuals value approval,80 law can affect behavior by
signaling what behavior will generate approval,81 causing individuals “to
update their prior beliefs about the approval pattern.”82 A notable example
of this involved workplace sexual harassment.83 Catharine MacKinnon has
attitudes in the direction of expecting more disapproval for behavior the
law condemns. Expecting disapproval for the behavior provides an incentive, independent of legal sanctions, to comply with the law.”
McAdams, supra note 70, at 371–72.
74
Geisinger, supra note 70, at 37 (“[S]cholars note that laws affect behavior not
only by making the behavior more costly, but also by affecting social norms and,
consequently, by changing an individual’s preferences for undertaking particular
acts.”); McAdams, supra note 70, at 389 (“In a democratic society, legislation and
other law can change what people believe about the approval patterns in their community or society; the law operates as a signal of popular opinion.”); Sunstein, supra
note 70 (arguing that the expressive function of law shapes social norms).
75
76
Cass R. Sunstein, Social Norms and Social Roles, 96 Colum. L. Rev. 903, 949
(1996).
77
McAdams, supra note 70, at 340.
78
Richard H. Pildes, Why Rights Are Not Trumps: Social Meanings, Expressive
Harms, and Constitutionalism, 27 J. Legal Stud. 725, 755 (1998); Sunstein supra
note 70, at 2022.
79
Richard H. McAdams, An Attitudinal Theory of Expressive Law, 79 Or. L. Rev.
339, 341 (2000).
80
McAdams, supra note 70, at 343 (“There are at least two reasons why approval
motivates behavior. An individual may value approval intrinsically because it satisfies a preference for esteem or instrumentally because it helps achieve other ends.”).
81
82
Id. at 359.
83
Danielle Keats Citron, Law’s Expressive Value in Combating Cyber Gender Harassment, 108 Mich. L. Rev. 373 (2009).
R
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explained that court decisions changed the social meaning of sexual harassment by labeling it a form of gender discrimination.84
Feminist scholars have long highlighted ways that law’s expressive effect can play a role in subordinating women. For example, Nadine Taub
and Elizabeth Schneider have explained that:
[B]eyond its direct, instrumental impact, the insulation of women’s world
from the legal order also conveys an important ideological message to the
rest of society . . . the law’s absence devalues women and their functions . . . In short, the law plays a powerful role, though certainly not an
exclusive role, in shaping and maintaining women’s subordination.85
Law therefore has served to “legitimate and perpetuate oppressive social systems through its expressive function by sending messages about the kind of
people and the institutions that we value.”86 Likewise, information about
the kind of athletes that are valued by education-based sports programs is
communicated forcefully in the name of Title IX.
B. The Expressive Power of Title IX
The first step in understanding Title IX’s expressive dimension is to
understand the mechanism by which Title IX communicates or creates understandings about women and sports. On the surface, it is clear that Title
IX as applied to sports does little “speaking” through its own provisions.
The statute itself does not address sports programs and the legislative history is sparse.87 We know, at least intuitively, however, that Title IX does
communicate in a way that shapes norms for women’s sports participation.
Indeed, Title IX is said to be the “first federal law to have achieved true pop
status.”88 The words “Title IX” have become synonymous with female ath84
Id. at 407–08.
Nadine Taub & Elizabeth M. Schneider, Women’s Subordination and the Role of
Law, in The Politics of Law (David Kairys ed., 3d ed. 1998).
86
Andrew A. Taslitz, What Feminism has to Offer Evidence Law, 28 Sw. U. L. Rev.
171, 179 (1999).
87
Note, Sex Discrimination and Intercollegiate Athletics: Putting Some Muscle on Title
IX, 88 Yale L.J. 1254, 1255 (1979).
88
Nancy Levit & Robert R.M. Verchick, Feminist Legal Theory: A Primer
107 (2006). See also Brake, supra note 59, at 1, 13 (stating that “appeals to Title IX
resonate broadly in American Popular culture” and that “Title IX has remained a
remarkably popular law precisely because it has been so effective in changing cultural norms to support greater opportunities for girls and women in sports”).
85
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123
letic achievement and power.89 There is even a company named “Title IX”
which markets upscale women’s athletic clothing. Moreover, although the
actual requirements of the statute and regulations are often not widely understood,90 there is no question that Title IX communicates beyond its
sanctions.91
Therefore, despite statutory language that does not address sports programs, Title IX carries important messages about sports participation
through its equality mandate. This is because the statute and its implementing regulations require only that women’s sports programs be
equivalent to men’s. Accordingly, the regulations contemplate and courts
give great deference to educational institutions to define the content of their
athletic programs. In this way, Title IX sends messages, or “speaks,”
through the educational institutions which create participation opportunities in the name of Title IX compliance. In addition, Title IX speaks
through Congress, courts, and other government actors who speak in the
name of Title IX when supporting and enforcing the law. Both of these
mechanisms shape the understandings that have developed about Title IX
and work to create the messages sent about Title IX and women’s athletics.
As will be explained in the next part, Title IX has signaled two different,
and likely for many potential female athletes, arguably conflicting messages.
The first message is one of equality and empowerment: that girls and women are entitled to participate in athletics on a basis equal to boys and men.
The second, less-examined message is far more complex. It is that the natural and expected goal of sports participation is to be a highly skilled athlete
capable of winning. Unpacking this message and how it is interpreted by
different groups of women is critical to understanding Title IX’s ability to
continue developing women’s interest in sports.
89
Nat’l Coal. For Women and Girls in Educ., supra note 10, at 7.
For instance, popular media reports often state that Title IX requires “equal
funding” for men’s and women’s athletics. Brake, supra note 59, at 2.
91
Note, supra note 87, at 1267 (explaining sport’s “symbolic role” and stating
that “the symbolic importance of sports in American society is undoubted”). See
also Susan K. Cahn, Coming on Strong: Gender and Sexuality in Twentieth-Century Women’s Sports 251 (1994) (explaining that Title IX’s equality principle had an impact outside of the federally-funded institutions to which the statute
applies).
90
124
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1. Title IX’s First Message: Equality, Empowerment and
Entitlement to Participate
Title IX has been said to be “a symbol of hope for women and
sports . . .”92 Indeed, much of what has made Title IX successful is its
expression of new norms for women’s sports participation.93 One is that
women can be athletes. Another is that women are entitled to participate in
sports with dignity and under conditions equal to men. At the time Title
IX was enacted, such notions were nearly revolutionary. Prior to the passage
of the statute, the message to females, taken as a seemingly natural understanding and reinforced by the law, was that sports were for boys and men
only.94 Sports programs played a “symbolic role” in reinforcing these gender stereotypes95 by signaling that sports participation by women was not
normal.96 An early case involving a girl seeking to join a Little League
baseball team illustrates this well. Just after Title IX was passed, in 1974,
Allison Fortin was denied the opportunity to join the Pawtucket, Rhode
Island Little League team on the basis of gender. She brought suit alleging
violations of her Fourteenth Amendment rights to Equal Protection. The
district court denied her claim, stating that the exclusion of girls was perfectly rational, because if girls were to play Little League baseball, there was
too much of a risk that they might be hurt.97 The district court credited the
testimony of an orthopedic surgeon who admitted that he had little experience with female athletes, but nevertheless opined that girls were “more
sedentary” and “likely to be in poorer condition than boys.”98 He also concluded, among other things, that girls “lacked the capacity to throw over-
92
Olson, supra note 36, at 106.
94
Note, supra note 87, at 1254 (“Intercollegiate athletics have been and continue to be a male domain that is particularly vulnerable to charges of sex discrimination.”); Eileen McDonagh & Laura Pappano, Playing With the Boys:
Why Separate is Not Equal in Sports (2008).
95
Note, supra note 87, at 1265.
96
McDonagh & Pappano, supra note 94, at 247; M. Marie Hart, On Being Female in
Sport, in Out of the Bleachers: Writings on Women and Sport 24 (Stephanie L. Twin ed., 1979) (“Although we have isolated and studied ‘Women in Sport,’
we have not so separated ‘Men in Sport’ as a special topic. This is because the latter
is accepted, rather than the exception, in sport discussions.”); Buzuvis, supra note
53, at 821.
97
Fortin v. Darlington Little League, 514 F.2d 344, 346 (1st Cir. 1975).
98
Id. at 349.
93
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125
hand.”99 The doctor’s opinions were also based on the fact that “it was the
normal activity of a young lady to keep off baseball fields and play with
dolls.”100 Similarly, in 1976, one year after Title IX’s regulations went into
effect, Victoria Ann Cape brought suit under the Equal Protection Clause
challenging the Tennessee Secondary School Athletic Association’s rules that
required six instead of the usual five players on each girls’ basketball team,
restricted the game to half-court and permitted only forwards to shoot the
ball.101 The state claimed several rationales for the rule, including that it
sought to protect the female players “who are weaker and incapable of playing the full-court game from harming themselves”; “to provide the opportunity for awkward and clumsy student athletes to play defense only”; and
to ensure a better game for the fans and continued fan support, because the
fans were “accustomed to a split-court game.”102 The athletic association
ultimately prevailed, as the court held that there was “no evidence of any
intent to discriminate against” female high school basketball players.103
This once natural understanding that it was not normal or safe for women to participate in sports was strongly reinforced by the state in that
government-funded institutions, the primary provider of sports opportunities in the United States, had little or no participation opportunities for
women. The effect of this sex discrimination was to dampen women’s interest in sports “often to the extent that they d[id] not even consider the possibility of participation.”104 Through Title IX and its implementing
regulations, Congress and the Executive Branch established sanctions for
discriminating against women in educational programs, and also hoped to
express and cultivate a new norm for sports participation that ended such sex
stereotyping. The result is that Title IX is widely credited with sending a
message that encourages women’s participation in sports.105
Title IX expressed a new definition of who an athlete can be in several
ways. To begin, Congress firmly endorsed gender equity in sports, by supporting the regulations drafted by the Department of Health, Education,
and Welfare (now administered by the Department of Education) and re99
Id.
Id. at 350.
101
Cape v. Tenn. Secondary Sch. Athletic Ass’n, 563 F.2d 793, 794 (6th Cir.
1977).
102
Id. at 795.
103
Id.
104
Note, supra note 7, at 1265.
105
See Dep’t of Educ. Office for Civil Rights, ED 409 618, Title IX: 25
Years of Progress (1997).
100
126
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peatedly rejecting efforts by male sports advocates that argued Title IX
would unfairly shift resources from male sports programs to women’s programs.106 Moreover, proposed amendments to Title IX that would have exempted revenue-producing intercollegiate sports (specifically men’s football
and basketball) from Title IX consistently were rejected as well.107 Congress
again sent the message that gender equity in sports was important with the
Civil Rights Restoration Act of 1987, passed in response to the Supreme
Court’s decision in Grove City College v. Bell,108 which limited Title IX’s
application to sports programs by holding that the statute only applied to
specific programs which received federal financial assistance, not an entire
institution. This effectively suspended application of Title IX to educationbased sports programs, because few, if any athletic departments received direct federal aid. Congress rejected this outcome, mandating that if any part
of the institution received federal financial assistance, Title IX applied to the
entire institution. Courts have said that the Act “mak[es] it crystal clear
that Title IX applies to athletic programs operated by any school receiving
federal funding for any of its educational programs and activities, and not
just to those athletic programs which directly received federal dollars,”109
and emphasized that the subject of “[a]thletics featured . . . prominently” in
Congress’s decision to reject the Supreme Court’s Grove City ruling.110 This
message was buttressed by courts unanimously upholding the regulations
defining Title IX’s requirements with respect to athletics and rejecting constitutional challenges to its application,111 finding that ending discrimina106
Neal v. Bd. of Trs. of Cal. State Univs., 198 F.3d 763, 770 (9th Cir. 1999)
(stating that “[a]n extensive survey of Title IX’s legislative history and the regulations promulgated to apply its provisions to college athletics concluded that boosters of male sports argued vociferously before Congress that the proposed regulations
would require schools to shift resources from men’s programs to women’s programs,
but that Congress nevertheless sided ‘with women’s advocates’ by deciding not to
repeal the . . . regulations”(quoting Mary Jo Festle, Playing Nice: Politics
and Apologies in Women’s Sports 171–76 (1996))).
107
See Equity in Athletics, Inc. v. Dep’t of Educ., 504 F. Supp. 2d 88, 95 (W.D.
Va. 2007) (citing 120 Cong. Rec. 15,322–23 (1974)).
108
465 U.S. 555 (1984).
109
Nat’l Wrestling Coaches Ass’n v. Dep’t of Educ., 263 F. Supp. 2d 82, 94
(D.D.C. 2003).
110
Equity in Athletics, Inc. v. Dep’t of Educ., 504 F. Supp. 2d 88, 103 (W.D.
Va. 2007).
111
Id. at 101–03 (explaining that “every circuit, in reviewing the Three-Part
Test set forth in the 1979 Policy Interpretation, has concluded that it is entitled to
substantial deference” and that “[l]ikewise, every Circuit, which has considered the
constitutionality of the proportionality prong of the Three-Part Test, has held that
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127
tion in education-based athletic programs is an important government
interest.112 Similarly, courts repeatedly have rejected challenges to Title IX
brought by male athletes.113
In addition, courts have recognized Title IX’s expressive value in shaping new norms for women’s participation in sports. For instance, as the
court stated in Neal v. Board of Trustees of California State Universities, “a
central aspect of Title IX’s purpose was to encourage women to participate in
sports: The increased number of roster spots and scholarships reserved for
women would gradually increase demand among women for those roster
spots and scholarships.”114 The court explained that this would effect
change in that
[t]he creation of additional athletic spots for women would prompt universities to recruit more female athletes, in the long run shifting women’s
demand curve for sports participation. As more women participated, social norms discouraging women’s participation in sports presumably
would be further eroded, prompting additional increases in women’s participation levels.115
Title IX also encourages women and girls to participate in sports by sending
the message that women are entitled to participate in sports with dignity,
and on terms equal to men, through cases that recognize the expressive
it does not offend constitutional principles of equal protection.”); See also Blake,
supra note 3, at 49–50 (asserting the same and citing Cohen v. Brown Univ., 991
F.2d 888 (1st Cir. 1993), remanded to, 879 F. Supp. 185 (D.R.I. 1995), aff’d in part
and rev’d in part, 101 F.3d 155 (1st Cir. 1996), cert. denied, 520 U.S. 1186 (1997);
Boucher v. Syracuse Univ., 164 F.3d 113, 117 (2d Cir. 1999); Favia v. Ind. Univ. of
Pa., 7 F.3d 332, 335–36 (3d Cir. 1993); Pederson v. La. St. Univ., 213 F.3d 858,
879 (5th Cir. 2000); Horner v. Ky. High Sch. Athletic Ass’n, 43 F.3d 265, 274
(6th Cir. 1994); Kelley v. Bd. of Trs., 35 F.3d 265, 268 (7th Cir. 1994); Neal v.
Bd. of Trs. of Cal. State Univs., 198 F.3d 763, 767–68 (9th Cir. 1999); Roberts v.
Colo. St. Bd. of Agric., 998 F.2d 824, 828–29 (10th Cir. 1993)).
112
Kelley v. Bd. of Trs., 35 F.3d 265, 272 (7th Cir. 1994) (stating that “[t]here
is no doubt but that removing the legacy of sexual discrimination . . . in the provision of extra-curricular offerings such as athletics — from our nation’s educational
institutions is an important governmental objective”).
113
See e.g., Chalenor v. Univ. of N. Dakota, 291 F.3d 1042 (8th Cir. 2002);
Neal, 198 F.3d 763 (9th Cir. 1999).
114
198 F.3d at 768.
115
Id. at 769 (further explaining that “Title IX has altered women’s preferences,
making them more interested in sports, and more likely to become student
athletes”).
128
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harms116 inherent in second-class treatment of female athletes. Cases involving claims of “equal treatment” emphasize “the message” sent to female
athletes who, for instance, must train or compete in inferior facilities or
during non-traditional seasons.117 A case involving disparities between facilities for a girls’ high school softball team and the boys’ baseball team
make this point well. In Daniels v. School Board of Brevard County, Florida,
the court recognized numerous harms that were present through the negative messages the disparate facilities sent. The court stated that:
As with all the differences the Court addresses in this Order, the fact that
the boys have a scoreboard and the girls do not sends a clear message to
players, fellow students, teachers and the community at large, that girls’
varsity softball is not as worthy as boys’ varsity baseball.118
The court further explained with respect to the bleachers on the girls’ softball field that photographs submitted by the softball players:
starkly illustrate that the bleachers on the girls’ softball field are in worse
condition and seat significantly fewer spectators, than the bleachers on the
boys’ field . . . . Again, the message this sends the players, spectators and
community about the relative worth of the two teams is loud and clear.119
116
Pildes, supra note 78, at 755 (“An expressive harm is one that results from
the ideas or attitudes expressed through a government action rather than from the
more tangible or material consequences the action brings about. On this view, the
meaning of a governmental action is just as important as what that action does.”).
117
Alston v. Va. High School League, 144 F. Supp. 2d 526, 536 (W.D. Va.
1999) (plaintiffs characterized their alleged harm partially in terms of the “negative
message” the high school athletic association’s actions sent). Other cases reflect this
discourse. See, e.g., McCormick v. School Dist. of Mamaroneck, 370 F.3d 275, 295
(explaining that “[s]cheduling the girls’ soccer season out of the championship
game season sends a message to the girls on the teams that they are not expected to
succeed and that the school does not value their athletic abilities as much as it
values the abilities of the boys”); Daniels v. Sch. Bd. of Brevard Cnty., 985 F. Supp.
1458, 1461 (M.D. Fla. 1997) (explaining that the disparity between the girls’ softball fields and the boys’ baseball fields, including the lack of lighting at the girls’
field, “sen[t] a clear message to players, fellow students, teachers and the community . . . that girls’ varsity softball [was] not as worthy as boys’ varsity baseball”);
Mason v. Minn. State High School League, No. Civ.03-6462(JRT/FLN), 2004 WL
1630968 (D. Minn. Jul. 24, 2004) (noting that it was a question of fact for the trier
to determine whether the choice of venue for girls hockey games sent a negative
message to girls hockey players and their fans); Blair v. Wash. State Univ., 740 P.2d
1379, 1381 (Wash. 1987) (stating that “[t]he message came through loud and
clear, women’s teams were low priority”).
118
Daniels, 985 F. Supp. 1458 at 1461.
119
Id.
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129
In entering the preliminary injunction, the court concluded that:
Each day these inequalities go unredressed, the members of the girls’ softball team, prospective members, students, faculty and the community at
large, are sent a clear message that girls’ high school varsity softball is not
as worthy as boys’ high school varsity baseball, i.e., that girls are not as
important as boys . . . the harm associated with that treatment as secondclass athletes is significant.120
The power of the message sent by Title IX and its immediate effect on
female athletes was captured by scholar Erin Buzuvis on the “Title IX Blog”
in reference to a case involving locker room facilities at several high schools
in North Carolina. In those cases, the schools ultimately complied with
Title IX by upgrading their facilities to be equivalent to those provided to
boys’ teams. The girls’ basketball coach was quoted as stating about the
upgraded facilities that “[m]y girls probably just felt like second-class citizens because the boys had such nice facilities, but now they feel like firstclass citizens.”121 As Professor Buzuvis explained, this feeling or message is
directly attributable to Title IX:
To me, this quote epitomizes the intent and effect of Title IX . . . . No
group should be stigmatized by second-class treatment. Discrimination in
athletics, whether it be in the number of participation opportunities for
each sex, or the quality of their playing fields and locker rooms, sends a
clear message to students about whose athletic experience society appreciates, expects, and respects . . . .122
Court decisions in the decades since Title IX was enacted continue to send
the message that women and girls are entitled to participate in athletics on
terms equal to men and boys. The result is that Title IX has steadily eroded
the stigma that formerly attached to women’s participation in sports and
shifted the dynamic, so that an ever greater stigma attaches to institutions
and individuals who discriminate against women athletes, at least with respect to participation.123 The case of Pederson v. Louisiana State University124
120
Id. at 1462.
Erin Buzuvis, First-Class Locker Rooms Remedy Title IX Violations at N.C. High
Schools, Title IX Blog (November 28, 2010, 9:00 AM), http://title-ix.blogspot.
com.
122
Id.
123
To be sure, Title IX cases continue to demonstrate that there is not enough
stigma attached to at least some forms of discrimination against women in sports,
such as through sub-par facilities, game scheduling and other conditions of
participation.
124
213 F.3d 858 (5th Cir. 2000).
121
130
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illustrates this well. In that case, the athletic director refused to establish a
women’s softball team despite considerable interest and the athletic department being severely out of compliance with Title IX. The case included
testimony that the athletic director thought soccer was a “more feminine
sport” and that some at LSU were concerned about adding fast-pitch softball
because the women “might get hurt.”125 Although these views of women
athletes once were mainstream, the fact that norms for women’s sports have
changed could be seen by the fact that the institution did nothing to defend
them. Instead, the university ultimately defended itself by arguing that its
athletics personnel were simply “ignorant” of the law’s requirements.126
Indeed, Title IX’s effect on changing norms for sports participation
and stigmatizing those who would deny women the right to participate can
be seen in opponents’ arguments as well as public reaction to attempted
changes to the law. Title IX critics often state that they agree with the
principles of equality and entitlement to participate, but that Title IX’s
regulatory implementation has gone too far. Moreover, efforts to roll back
Title IX’s equality mandate have often been attempted quietly and not in
full view to avoid public outcry. For instance, in 2002, the Department of
Education formed a “Commission on Opportunities in Athletics” with the
purpose of studying Title IX and making recommendations for changes to
the implementing regulations. The Commission was widely criticized as
favoring male athletic interests and Title IX opponents. The Commission
issued a report in 2003 that recommended changes to Title IX enforcement
that would have significantly limited Title IX’s equality mandate. The reaction to the Commission’s report was “public outrage,”127 and the Department of Education ultimately rejected the Commission’s recommendations.
Two years later, however, the agency quietly issued a “Clarification” of Title
IX’s regulations that adopted two of the Commission’s recommendations
and allowed schools to gauge women’s athletic interest via e-mail surveys.
This change was resoundingly criticized and subsequently eliminated by the
Obama Administration, reaffirming the message that women are entitled to
participate in sports on terms equal to men.
125
Id. at 881.
Id. at 881–82.
127
Nat’l Coal. for Women and Girls in Educ., supra note 10, at 13. Former
Senator Birch Bayh, who played a significant role in Title IX’s enactment, stated
that the reaction to the Commission’s report was a “firestorm” and that the political
process had been “harness[ed]” so that the proposed changes to Title IX which were
backed by the Bush Administration were defeated. Birch Bayh, Personal Insights and
Experiences Regarding the Passage of Title IX, 55 Clev. St. L. Rev. 463, 470 (2007).
126
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131
Thus, the increase in women and girls’ participation in sports in the
aftermath of Title IX illustrates that the expressive effect of the statute and
regulations both eroded the stigma of women’s participation in sports and
discouraged discrimination in sports based on gender as institutions attempted to comply with the law and avoid sanctions, but also avoid the
perception that they held outmoded views about women athletes. Title IX
therefore has carried important moral weight that convinced people that the
existing norms for sports participation which excluded women were wrong
and deserved to be replaced.128 These messages had the consequence of encouraging women to participate in sports. The expressive meaning of Title
IX therefore seemingly achieved both effects — discouraging discrimination
and encouraging interest — simultaneously. These consequences are still
thought to be the logical result of Title IX’s anti-discrimination mandate.
However, this assumption is no longer warranted in the face of women’s
persistent, lagging participation rates, especially among certain populations.
Therefore, the next part considers whether Title’s IX’s empowerment message can still have the dual effect of discouraging discrimination and encouraging women’s participation in athletics. In doing so, it is important to
consider whether the empowerment message resonates with diverse groups
of girls and women. As will be explained below, a more complex message is
being sent in the name of Title IX, and it is one that can have a significant
impact on whether women and girls decide to participate in athletics. This
signal is that the prevailing norms of the student-athlete experience – training to win and cultivate spectator appeal – are the natural goal of participation in sports, and that certain women and girls are more able to reach that
goal than others.
2. Title IX’s Second Message: The Exclusive Conception of
Who Can Be an Athlete
Understanding Title IX’s expressive content more fully is crucial to
determining how its message of empowerment and entitlement to participate might resonate for some women but be diluted for others. To do this,
we must first understand the model for athletics in which Title IX’s opportunities are created. At the time Title IX was passed there were significant,
troubling questions about education-based sports programs in the United
States.129 The prevailing model emphasized winning and commercialism
128
See Sunstein, supra note 68, at 2031.
Peter Adler & Patricia Adler, From Idealism to Pragmatic Detachment: The Academic Performance of College Athletes, 58 Soc. Of Educ. 241 (Oct. 1985) (“[T]he
129
132
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more than participation and academics. And, of course, the model openly
excluded women. While Title IX caused individuals and institutions to
update their views of women participating in sports, the law’s equality
framework did nothing to update the model that was constructed by men
for the male student-athlete.130 Time has shown that this model is one that
is more readily accessed by upper-middle class white women who can assimilate into it more easily because they have the resources to meet its demands.
As a result, Title IX developed a second, and far less examined message that
must be taken into account when determining how best to achieve gender
equity in sports.
a. The Model for Sport in Educational Institutions
Examining the model for sports that exists in our educational institutions is essential to understanding Title’s IX’s expressive dimension because
opportunities created for women in this model are created in the name of
Title IX. This is because Title IX allows institutions to construct their
sports programs as they see fit, adhering only to the principle of gender
equality. Institutions therefore define which female athletes have sufficient
“ability” to claim a participation opportunity and which women’s sports
will be offered in an effort to comply with Title IX. Moreover, educationbased sports opportunities have important symbolic force, as these education-based athletics programs provide the most significant number of athletic participation opportunities in the United States.131 Scholar Deborah
Brake has explained that Title IX implicitly incorporates the model of “elite
competitive sports as the baseline measure of equality.”132 This model is
“dominant”133 in our educational institutions today. It is also a model that
structure of universities with big-time athletic programs and the athletes’ patterned
experiences within these universities undermine their attainment of the professed
goals of the educational system . . . [M]ost studies of college athletes have found a
negative relationship between athletic participation and academic performance.”).
130
See e.g., Koller, supra note 15, at 439; Erin E. Buzuvis, Sidelined: Title IX
Retaliation Cases and Women’s Leadership in College Sport, 17 Duke J. Gender L. &
Pol’y 1, 1 (2010).
131
See e.g., Olson, supra note 36, at 105 (stating that “colleges, universities and
high schools” are the “loci of female athletes’ most visible exclusion and inferiority”); Note, supra note 87, at 1265 (explaining the importance of the “symbolic
role of intercollegiate sports”).
132
133
Id. at 542.
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133
was constructed by men, for the purpose of masculinizing males.134 In my
previous work, I explained that this model was left unchanged by Title IX,
so that women seeking to participate in education-based sports programs
must assimilate into the model for athletics that was built on the male
norm.135 Thus, because opportunities generated by Title IX’s requirements
operate within this framework, it is important to examine specifically the
characteristics of that model and how it might speak to women in the name
of Title IX.
The overarching characteristic of the model for athletics in our educational institutions today is its preference for high-level athletes.136 Colleges
are spending ever-increasing funds to recruit elite athletes, including female
athletes, for their athletic programs.137 Colleges and universities now emphasize winning more than ever, with athletic directors paid bonuses if they
produce teams that win championships.138 Spending on athletics has grown
by double digits over the last decade, as schools see sports as a marketing
tool, and with television contracts for even minor sports, athletic directors
say they want viewers and alumni to see winning teams.139 The emphasis on
elite ability in educational institutions is also underscored by the fact that it
can serve other national interests, with members of Congress and sports
leaders expressing the sentiment that educational institutions have an important role to play in training Olympic athletes. For example, in a 1995
hearing on the Amateur Sports Act, the executive director of the United
States Olympic Committee, Richard Schultz, explained that a priority for
the USOC was partnering with the NCAA to preserve and enhance col-
134
See Koller, supra note 15.
Id.
136
See e.g., Cahn, supra note 91, at 9–11; Pete Thamel, Coaches Finding No Tolerance for Losing, N.Y. Times, April 1, 2010, at B12 (“‘If you get fired for cheating,
you can get hired right back again,’ he said. ‘If you get fired for losing, it’s like
you’ve got leprosy.’”).
137
Libby Sander, Have Money, Will Travel: The Quest for Top Athletes, Chron. of
Higher Educ., Aug. 1, 2008, available at http://chronicle.com/article/Have-MoneyWill-Travel-the/28750/.
138
Joe Drape & Katie Thomas, As Colleges Compete, Major Money Flows to Minor
Sports, N.Y. Times, Sept. 2, 2010, http://www.nytimes.com/2010/09/03/sports/
03cup.html.
139
Id.
135
134
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legiate programs in Olympic sports and protect the pipeline of Olympic
athletes that come from college programs.140
Of course, achieving elite ability can only come from intense training
and skill development. As a result, a prospective athlete today is best positioned to claim one of the limited positions on a high school and, most
importantly, college or university team if he or she starts participating in
competitive sports at an early age,141 specializes in one sport during childhood and trains year-round. Title IX scholars have noted as much, observing that there is an “increasingly competitive environment for women’s
intercollegiate sports where there are very few opportunities for female college athletes to ‘walk on’” 142 to a sports team. This competitive environment means that, as a practical matter, “it takes years and years of
competitive play to have the necessary skill to take advantage of the sports
opportunities Title IX has created at the college level,”143 with training
regimens that often could be considered extreme even for adults.144 Indeed,
the medical community has taken note, by urging parents and coaches to
exercise restraint in pushing young athletes.145 One of the negative aspects
140
Amateur Sports Act: Hearing Before the Subcomm. on Consumer Affairs, Foreign
Commerce, and Tourism of the S. Comm. on Commerce, Science, and Transp., 104th Cong.
41 (1995) (statement of Richard Schultz, Executive Director, U.S. Olympic Games).
141
James White & Gerald Masterson, Problems in Youth Sports, Family Resource, available at www.familyresource.com/parenting/sports/problems-in-youthsports (“Starting ages for youth in competitive sports have lowered dramatically in
the past two decades . . . [and an estimated] 40 million children are involved in
competitive sports. It’s not just the numbers that are staggering, but the manner in
which kids are playing.”).
142
Brake & Williams, supra note 42, at 201.
143
Id.
144
Comm. on Sports Med. and Fitness, Am. Acad. of Pediatrics, Intensive
Training and Sports Specialization in Young Athletes, 106 Pediatrics 154, 154 (2000).
See also Andrew Ferguson, Inside the Crazy Culture of Kids Sports, Time, July 12,
1999, available at http://www.time.com/time/magazine/article/0,9171,991464,00.
html; Steven W. Gray, Sport Specialization by Children, Township Lacrosse June
16, 2009, available at http://www.townshiplacrosse.com/uploads/Sport_Specializa
tion.pdf (“A main reason for the rise in sport specialization by children athletes is
the increasing commercialization of sport.”); Detavius Mason, Age of Specialization:
One Sport Vs. Multisports, Guilford Orthopaedic and Sports Med. Ctr., http://
www.guilfordortho.com/age_of_specialization.htm; Bob Condor, Living Well: How
Much is Too Much in Youth Sports, Seattle Post – Intelligencer, Sept. 26, 2004,
available at http://www.seattlepi.com/health/192359_condor27.html.
145
Comm. on Sports Med. and Fitness & Comm. on Sch. Health, Am. Acad.
of Pediatrics, Organized Sports for Children and Preadolescents, 107 Pediatrics 1459
(2001).
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135
is early specialization and overtraining, with numerous reports of girls in
sports like basketball and soccer training year-round and suffering the injuries that almost inevitably result.146 One youth sports organization has
summed up the problems by explaining that “[o]ne of the biggest issues in
youth sports today is the professionalization of children’s sports . . . [including] adults pressuring kids to win at early ages, along with single-sport
specialization and year-round training.”147 Sport specialization is defined as
“athletes limiting their athletic participation to one sport which is practiced, trained for and competed in throughout the year.”148 Social scientists
have long discussed the “alarming trend” of specialization, which has been
described as “simply inconsistent with a high school’s educational goals and
objectives.”149 While high school coaches and administrators are charged
with providing a sound athletic program to augment educational goals, they
are also expected to field teams that win.150 It is also believed that specialization will make athletes more competitive for a college scholarship.151
Nevertheless, social scientists have noted that although “specialization enhances individual and team performance, it undermines the basic purpose of
high school athletics.”152 Indeed, while it is generally accepted that sports
participation is a beneficial activity, there are “numerous negative effects”
146
Jack Kelly, More Girls In Sports Means More Injuries, Pittsburgh Post-Gazette, May 28, 2008, available at http://wwww.post-gazette.com/pg/08149/885201114.stm (“Girls are specializing in a sport much younger than they have been in the
past . . . . Constant pressure to perform is putting them at greater risk [for injury].”); B.J. Koubaroulis, Scholarships With a Cost: Soccer Standouts Play Year-Round
at Frenetic Pace, Wash. Post, May 21, 2009, available at http://www.washington
post.com/wp-dyn/content/article/2009/05/20/AR2009052003308.html (noting
that “pressures from parents, coaches and other athletes often cause players to overindulge [in grueling practice and playing schedules] during such a critical developmental stage”).
147
NCAA, Alliance Issues ‘Poor Grades’ on National Youth Sports
Report Card (2005), available at http://fs.ncaa.org/Docs/PressArchive/2005/
Announcements/Alliance%2BIssues%2BPoor%2BGrades%2Bon%2BNational%2B
Youth%2BSports%2BReport%2BCard.html (internal quotation marks omitted).
148
Jay Watts, Perspectives on Sport Specialization, 73 J. Phys. Ed. Recreation &
Dance 32 (2002).
149
Id.
150
David Susanj & Craig Stewart, Specialization in Sport: How Early . . . How
Necessary?, Coaches Info, http://www.coachesinfo.com/index.php?option=com_
content&id=303&Itemid=170 (last visited Nov. 9, 2011).
151
Watts, supra note 148.
152
Susanj & Stewart, supra note 150.
136
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from sport specialization,153 including “burnout,” where an athlete simply
quits participating in all sports.
Aside from the effects on the child-athlete, the model for sports that
predominates in our educational institutions is also one that is costly for
parents and caregivers. Countless blogs and news stories have detailed the
enormous costs of youth sports participation, as most athletes who hope to
claim a position on a high school or college team also participate in private
or “club” sports in an effort to develop their talents to the highest level
possible. Such costs can amount to thousands of dollars per year.154
Of course, the result of fielding specially-trained, highly skilled athletes is that such athletes support the commercial interests of the institution.
This is the case because better athletes — and athletes whose primary focus
is sports — are more likely to win. Social scientists have long pointed out
that winning has taken center-stage in the model for high school and college
sports because winning sports programs provide spectator interest and commercial appeal.155 As explained by one observer, “high school and college
programs have concentrated the vast majority of their resources on sports for
which there is considerable public interest and the prospect of professional
sports opportunities.”156 This has led to the well-known, now familiar issue
of playing-to-win subverting academic pursuits in the lives of student-athletes.157 Title IX does nothing to change this phenomenon, and in fact even
reinforces it. Because Title IX serves to ensure that girls will not be denied
153
Watts, supra note 148.
Karen Datko, The High Cost of Youth Sports, MSN Money (May 10, 2011),
http://money.msn.com/saving-money-tips/post.aspx?post=673566d4-b94f-4f33-a1
bf-39fb416498f4; Laura T. Coffey, Ten Ways to Get a Grip on Sports Costs for Kids,
MSN Today Money (July 30, 2010), http://today.msnbc.msn.com/id/32063374/ns/
today-money/t/ways-get-grip-sports-costs-kids/#.TqhqenFffn0; Don Delco, Youth
Sports Become Big Time at Big Cost, This Week News (August 6, 2008), http://www.
thisweeknews.com/content/stories/dublin/news/2008/08/06/0807duclubsp_sp.html.
155
Joe Drape & Katie Thomas, As Colleges Compete, Major Money Flows to Minor
Sports, N.Y. Times, September 2, 2010, http://www.nytimes.com/2010/09/03/
sports/03cup.html. This feature of the male model for sports in educational institutions was recognized by women’s sports leaders who were concerned that women’s
sports programs would take the same direction. Cahn, supra note 91, at 247 (noting that women’s sports leaders were concerned with the “crass commercialism,
corruption and win-at-all-costs attitudes” of intercollegiate sports.).
156
Amateur Sports Act: Hearings, supra note 48, at 187 (statement of Donna A.
Lopiano, Executive Director, Women’s Sports Foundation).
157
This familiar assessment now applies to some women’s sports, as well, with
reports that women’s basketball players are having “widespread” problems with
academics. Ian Begley & Mitch Abramson, Girls Game Gone Wild: Increased Opportu154
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the same opportunity for commercialized athletics participation as men, the
regulations state that a school cannot “limit the potential for women’s athletic events to rise in spectator appeal.”158
b. How the Model Can Become Title IX’s Message
To understand how Title IX’s equality and empowerment message
could be diluted, it is important to understand how the model for sports
prevailing in our educational institutions speaks in the name of Title IX, so
that the model in effect becomes one of Title IX’s messages. It is important
to appreciate how such powerful and clear signals to women and girls about
their ability or entitlement to participate in sports can be overshadowed to
the point where the law’s message is not just one of encouragement, but for
some women and girls, a signal that sports are not for them. The reason lies
in the fact that “expressive meanings are socially constructed,” and are “a
result of the ways in which actions fit with (or fail to fit with) other meaningful norms and practices in the community.”159 Context matters,160 and
Title IX itself contemplates that the context for the equality and empowerment message the law seeks to send will be shaped by administrators of
education-based sports programs. Of course, to some extent, the message of
equality and entitlement to participate has been diluted by the foot-dragging and cynical attempts at Title IX compliance that many institutions
have engaged in since the statute was passed. This continuing, albeit more
subtle, discrimination against women in sports cannot be discounted as a
reason why some women do not participate in sports. However, this explanation does not account for the fact that Title IX’s expressive content includes a message of exclusion not based in gender discrimination, but in
discrimination by institutions against those who cannot meet the prevailing
norms of the student-athlete culture.
This type of discrimination is fully contemplated by Title IX, because
Title IX does not articulate a vision or define standards for education-based
sports programs beyond gender equality. The statute and regulations instead give deference to educational institutions to define the content of their
nity on Court Brings Familiar Pitfalls Off of it, N.Y. Daily News, Nov. 26, 2008,
available at lexisnexis.com.
158
Title IX of the Education Amendments of 1972; a Policy Interpretation;
Title IX and Intercollegiate Athletics, 44 Fed. Reg. 71,413, 71,416 (Dec. 11,
1979).
159
160
Id. at 1507.
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athletic programs.161 For instance, perhaps most notably, institutions are
permitted to determine whether to allow males and females to participate
together on teams in “contact sports.”162 Moreover, as stated most recently
in a 2010 OCR Dear Colleague letter, and repeatedly emphasized, “the
three-part test is intended to allow institutions to maintain flexibility and
control over their athletic programs . . . .”163 The 1996 Policy Clarification
makes a similar point, stating that “the three-part test furnishes an institution with three individual avenues to choose from when determining how it
will provide individuals of each sex with non-discriminatory opportunities
to participate . . . .”164 Additionally, prongs two and three of the three-part
test state that institutions are responsible for effectively accommodating the
athletic “interest” and “ability” found in the “underrepresented” gender.
There is no standard by which interest and ability is judged, but it is instead
given meaning by the institutions themselves, whose coaches and administrators have the final word on whether a potential athlete has the requisite
interest and ability to be a member of a team. Thus, while they must use
non-discriminatory methods of assessment to determine the interests and
abilities of potential female student-athletes, institutions still may use
“methods of their choosing.”165 In addition, in determining whether a
given sport “counts” for Title IX purposes, OCR defers to the NCAA and
other organized sports regulatory bodies by using a rebuttable presumption
that sports which are so recognized will be acceptable for Title IX purposes.166 If an activity is not so recognized, OCR uses several factors to
evaluate the activity, including whether the activity is “structured and administered in a manner consistent with established intercollegiate or interscholastic varsity sports in the institution’s athletic program.”167
161
See Yellow Springs Exempted Vill. Sch. Dist. Bd. of Ed. v. Ohio High Sch.
Athletic Ass’n, 647 F.2d 651 (6th Cir. 1981); Equity in Athletics, Inc. v. Dep’t of
Educ., 504 F. Supp. 2d 88, 112 (W.D. Va. 2007) (explaining that schools should be
permitted “to chart their own course in providing athletic opportunities without
judicial interference or oversight”).
162
34 C.F.R. § 106.41(b) (2010).
163
Ali, supra note 35.
164
Cantú, supra note 31.
165
Ali, supra note 35. In addition, assessing ability includes “opinions of
coaches, administrators and athletes at the institution regarding whether interested
students . . . have the potential to sustain an intercollegiate team.” Id.
166
Letter from Stephanie Monroe, Assistant Secretary for Civil Rights, to Colleague (Sept. 17, 2008) (on file with Department of Education).
167
Id.
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Because Title IX did not change the model for sports operating in
educational institutions, and in fact its equality mandate guarantees women
the same quality of participation opportunities as those provided for men,
Title IX’s expressive content includes not just the message of equality and
empowerment, but also the signals sent by the types of opportunities created
by institutions in an effort to comply with Title IX. Therefore, educational
institutions and their athletics programs speak in the name of Title IX. It is
apparent that the model for sports operating in most educational institutions expresses meanings about sports and who an athlete can be. This more
nuanced message is reinforced by the rhetoric often used by courts and other
government officials in discussing Title IX. This rhetoric, likely an effort to
spur more women to participate in sports, often highlights women athletes’
skill and athletic achievements and it is part of the message sent by Title
IX.168
1. The Rhetoric of Athletic Achievement in Title IX Cases
Title IX rhetoric did not always emphasize women’s athletic skill and
achievement. In the early cases involving claims of gender equity in
sports,169 courts often did not highlight the fact that the female athlete
plaintiffs were highly skilled or elite-level, but instead stressed the athletes’
desire simply to participate and play the game. For instance, when Allison
Fortin sought to play Little League baseball, the court made no mention of
any particular talent Allison may have had with respect to baseball. The
case instead centered on her interest in the sport.170 Similarly, in Force v.
Pierce City, the plaintiff sought to try out for the boys’ football team.171
Although the court noted that the plaintiff was interested in athletics172 and
that it would not be unsafe for her to participate in the football program,173
it was not emphasized that she had any particular athletic talent or elite
ability. Other early cases similarly reflect the emphasis on the plaintiff’s
interest in sports, and not necessarily a unique ability to play at a high
168
McAdams, supra note 71, at 341 (explaining that court decisions have an
expressive effect).
169
Such claims were made under Title IX as well as the Equal Protection Clause.
170
Fortin v. Darlington Little League, Inc., 514 F.2d 344, 350 (1st Cir. 1975).
171
Force v. Pierce City R-VI Sch. Dist., 570 F. Supp. 1020, 1021 (W.D. Mo.
1983).
172
Id. at 1022 (“Nichole Force mentioned to her mother that she was greatly
looking forward, that coming fall, to trying out for the seventh grade football team
. . . . Nichole had already been involved to a considerable extent in athletics . . . .”).
173
Id. at 1028.
140
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level.174 Of course, the fact that these early plaintiffs generally were not
highly skilled athletes was a sign of the times – women had difficulty
achieving such status because they were generally denied any meaningful
opportunity to participate in sports. However, Title IX’s message of empowerment reflected in cases and commentary over the last forty years has
been accompanied by what is perhaps an even more powerful signal about
the type of athlete — one who is a highly skilled winner — that is most
valued and therefore entitled to participate.175 This signal is clearly seen in
the Title IX cases which emphasize the plaintiff’s athletic talent and the
goal of athletic achievement.
For example, in an early Title IX case challenging the exclusion of two
high school golfers from the school team because of their gender, the court
stated that “here two gifted female children are asking for the same attention that is received by their brothers. When a possible future Patti Berg or
Nancy Lopez reaches out to the courts for help, the court must examine its
power and authority carefully to see if there is a way to help.”176 Similarly,
a court explained with respect to a girl seeking to play on the boys’ basket174
See Morris v. Mich. State Bd. of Educ., 472 F.2d 1207 (6th Cir. 1973)
(describing the plaintiffs as girls who had the “desire” to play high school tennis);
Brenden v. Indep. Sch. Dist. 742, 477 F.2d 1292 (8th Cir. 1973); Neb. Sch. Activities Ass’n, 684 F. Supp. 626 (D. Neb. 1988); Lantz v. Ambach, 620 F. Supp. 663
(S.D.N.Y. 1985); Haffer v. Temple Univ. 524 F. Supp. 531 (E.D. Pa. 1981); Jones
v. Okla. Secondary Schs. Activities Ass’n, 453 F. Supp. 150 (W.D. Okla. 1977);
Darrin v. Gould, 540 P.2d 882 (Wash. 1975); Israel v. W. Va. Secondary Schs.
Activities Comm’n, 388 S.E.2d 480 (W. Va. 1989). Even early cases involving boys
seeking the right to play on girls’ teams illustrate the fact that an athlete with
exceptional skill was not the norm in education-based sports programs. See Williams v. Sch. Dist. of Bethlehem, Pa., 998 F.2d 168, 170 (noting that plaintiff boy
had athletic skills that were “average”).
175
Brian Porto explains this aspect of Title IX’s message well. In his book A
New Season, he tells the story of Nicci Rinaldi, a gifted basketball player who accepted a scholarship to play basketball at Auburn University in Alabama. Rinaldi
was one of the top women’s basketball players in the country and she had been
recruited to play for several accomplished women’s basketball programs. Rinaldi
began her college basketball career excited to play in the highly competitive and
high profile Southeastern Conference. She was what many courts and Title IX advocates would call a Title IX success story. Unfortunately, she was immensely unhappy with the day-to-day life of being a college basketball player, describing her
grueling practice schedule and isolation from the college experience as “hell.” Rinaldi subsequently transferred to Dartmouth College, which, as part of the Ivy
League, forbids athletic scholarships. There, she played basketball for the love of
the game and participated fully in college life. Brian Porto, A New Season:
Using Title IX to Reform College Sports 1–2 (2003).
176
Othen v. Ann Arbor Sch. Bd., 507 F. Supp. 1376, 1379 (1981).
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ball team that “Karen O’Connor is an extraordinarily gifted basketball
player.”177 Cases involving scheduling of high school sports also often highlight the talent of the female athletes, with plaintiffs successfully arguing
that scheduling their sport in an “off season” or “non-traditional” season
amounts to discrimination because the scheduling of sports can affect girls’
visibility and access to college recruiters, a benefit long-afforded to boys’
teams and one that is relevant to the most highly skilled athletes.178 For
instance, in a case involving disparate athletic facilities for girls’ softball
players as compared to boys’ baseball players, the court recognized the harm
that the unequal treatment had on the plaintiffs in that it would jeopardize
their ability to play at the highest levels. The court stated that “[the plaintiffs] are seeking athletic scholarships, many of which, [p]laintiffs maintain,
are not decided until after the softball season is over. Accordingly, it is
critical that the two girls do their best during their final season.”179 Another Title IX high school sports scheduling case illustrates how courts
communicate that being a highly skilled athlete, instead of one who simply
values participation, is the ideal. In McCormick v. School District of
Mamaroneck, a group of female athletes challenged the scheduling of soccer
in the spring for girls, while it was scheduled in the fall for boys. The court
held that the players demonstrated that they were “irreparably harmed” by
being forced to play in the spring season, which necessarily meant that they
could not compete for the state championship.180 Notably, the court highlighted the fact that the plaintiffs were part of the Olympic Development
program for “girls with exceptional ability in soccer.”181 It was also noted
that the girls participated on elite “club” soccer teams and that spring soccer, instead of fall soccer, made competing on both teams difficult. In addition, it was alleged that playing soccer in the spring disadvantaged the girls
in terms of college recruiting, because many coaches recruit at club games in
the spring. Girls who are playing both for their club and their high school
team in the spring are therefore “not at their best” because they have not
been able to practice as much with their club team, they are injured from
177
O’Connor v. Bd. of Educ. of Sch. Dist. 23, 545 F. Supp. 376 (N.D. Ill.
1982).
178
McCormick v. Sch. Dist. of Mamaroneck, 370 F.3d 275, 291–96 (2d Cir.
2004); Cmtys. for Equity v. Mich. High Sch. Athletic Ass’n, 178 F. Supp. 2d 805,
848–50, 855–57 (W.D. Mich. 2001), aff’d, 459 F.3d 676 (6th Cir. 2005).
179
Daniels v. Sch. Bd. of Brevard Cty., Fla., 985 F. Supp. 1458, 1462 (M.D. Fl.
1997).
180
McCormick, 370 F.3d at 299 n. 25.
181
Id. at 281.
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“playing too much soccer” and, at that point in the year, “many are burned
out.”182 Also of note is that in McCormick, the school district argued that
the plaintiffs’ claim reflected an unhealthy “single mindedness” with respect to soccer. The court rejected this argument and praised the athletes,
stating “many would include ‘single mindedness’ in a list of those traits
possessed by great athletes. Few would choose the trait ‘well-rounded.’” 183
Similarly, in Biediger v. Quinnipiac University, the plaintiffs challenged
the university’s decision to eliminate its varsity volleyball team. The court
explained in great detail who the affected athletes were in terms of ability,
starting with the recruitment process for intercollegiate volleyball, noting
that “the recruiting process for Division I volleyball can begin as early as a
player’s sophomore year in high school.”184 To reach the level of being recruited, the athletes testified that they “began playing volleyball on a competitive basis in fourth or fifth grade. In addition to playing volleyball for
their high school teams, the recruited plaintiffs played for club teams during
the off-season, traveling to interstate competitions on the weekends and
thereby maintaining a year-round commitment to volleyball.”185 Moreover,
the plaintiffs testified that they chose Quinnipiac because they felt a “bond”
with the team, which was crucial because “playing Division I volleyball is a
time-intensive activity, akin to a full-time job.”186 The court noted that,
“[g]iven the number of hours spent practicing, playing and traveling with
the team,” athletes’ relationship with the coach and each other was important.187 The court ultimately entered a preliminary injunction prohibiting
the university from eliminating the volleyball team, noting that the plaintiffs would suffer irreparable harm because of the
loss that even a year of competition would have on the skills and competitiveness of elite Division I athletes such as the student plaintiffs in this
case [who] have devoted a significant portion of their lives to training for
the opportunity to compete on a Division I volleyball team in college,
spending countless hours competing on high school and club teams and
participating in the rigorous and time-consuming recruiting process . . . .
As explained above, losing a year of competition would cause unquantifiable harm to their elite volleyball training and skill development.188
182
183
184
185
186
187
188
Id. at 282.
Id. at 296.
Biediger v. Quinnipiac Univ., 616 F. Supp. 2d. 277, 282 (D. Ct. 2009).
Id. at 282.
Id. (internal quotation marks omitted).
Id.
Id. at 292.
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143
The emphasis on elite-level achievement as the natural goal of sports participation is also seen in the rhetoric of cases and commentary celebrating Title
IX for this very fact. For instance, part of the Title IX narrative has long
been the recitation of the number and success of elite female athletes on the
Olympic and World Championship level. For example, the court in Cohen v.
Brown University stated:
One need look no further than the impressive performances of our country’s women athletes in the 1996 Olympic Summer Games to see that
Title IX has had a dramatic and positive impact on the capabilities of our
women athletes, particularly in team sports. These Olympians represent
the first full generation of women to grow up under the aegis of Title IX.
The unprecedented success of these athletes is due, in no small measure, to
Title IX’s beneficent effects on women’s sports . . . . What stimulated this
remarkable change in the quality of women’s athletic competition was not
a sudden, anomalous upsurge in women’s interest in sports, but the enforcement of Title IX . . . .189
Another court upholding Title IX explained that “this past summer, 90,185
enthusiastic fans crowded into Pasadena’s historic Rose Bowl for the finals of
the Women’s World Cup Soccer match . . . . [T]he victory sparked a national celebration and a realization by many that women’s sports could be
just as exciting, competitive, and lucrative as men’s sports. . . .”190
Other cases similarly highlight the plaintiff-athlete’s skill at her
sport.191 Accordingly, while courts uniformly have upheld Title IX’s mandates, they often have done so by using rhetoric reinforcing the norm that
athletic skill and accomplishment is what is most valued about sports participation. In this respect, courts have sent the message that Title IX opportunities are for highly-skilled, elite athletes focused on winning. In the
words of the Second Circuit, “a primary purpose of competitive athletics is
to strive to be the best.”192
189
Cohen v. Brown Univ., 101 F.3d 155, 188 (1st Cir. 1996) (emphasis added).
Neal v. Bd. of Trs. of Cal. State Univs., 198 F.3d 763, 773 (9th Cir. 1999).
191
Brust v. Regents of Univ. of Cal., No. 2:07-cv-1488 FCD/EFB 2007 WL
4365521, at *1 (E.D. Cal. Dec. 12, 2007) (explaining that the plaintiffs are all
“highly skilled athletes” who had been involved in their sports since childhood);
Beasley v. Ala. State Univ., 966 F. Supp. 1117, 1120 (M.D. Al. 1997) (highlighting plaintiff as a “skilled” volleyball player); Roberts v. Colo. State Univ., 814
F.Supp. 1507, 1517 (D. Col. 1993) (noting plaintiffs’ “dedication” to softball and
significant “talent”).
192
McCormick v. Sch. Dist. of Mamaroneck 370 F.3d 275, 295 (2d Cir. 2004).
190
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2. The Rhetoric of Athletic Achievement and Title IX by
Government Officials
The rhetoric used by government officials in support of Title IX also
has reinforced the seemingly natural norm of elite athletic achievement as
the goal of sports participation in the many reports and speeches given about
Title IX’s value and success. For example, in its report titled “Title IX: 25
Years of Progress – June 1997,” the Office of Civil Rights highlighted women’s basketball as an example of Title IX’s success. OCR’s report noted:
In 1972, 132,299 young girls played high school basketball. In 1994-95
the number had increased to 412,576, an increase of over 300 percent. In
the last two years, women’s basketball has come of age with the goldmedal victory of the American women’s basketball team at the 1996
Olympics, the increased media attention to the NCAA women’s basketball
tournament, and the development of two professional women’s basketball
leagues.193
Similarly, the report highlighted women’s success in soccer, stating:
In one sport that is more and more a favorite for young girls — soccer —
the results have led to a World Cup Championship. In 1996, the U.S.
National soccer team captured the first-ever women’s Olympic medal in
this sport before a crowd of 76,481, and in doing so, established its position as the world’s premier women’s soccer program.194
Title IX’s statement about the type of athletes that are valued — those who
are highly skilled and can cultivate spectator appeal (and by extension, institutional prestige) — is also communicated through statements about Title
IX’s connection to the United States’ Olympic aspirations. One of the
hoped-for effects of Title IX, at least to many members of Congress, was
that it would help increase our pipeline of female Olympians. As stated by
Norma Cantú, former Assistant Secretary for Civil Rights at the Department of Education:
Senator Hatch has perhaps best captured the essence of the meaning and
promise of Title IX. In 1984, on the Senate floor, he observed that there
were few, if any, Senators who did not want “Title IX implemented so as
193
U.S. Dep’t of Educ.: Title IX: 25 Years of Progress – June 1997, available at
http://www2.ed.gov/pubs/TitleIX/part5.html.
194
Id.
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145
to continue to encourage women throughout America to develop into
Olympic athletes . . . .”195
Finally, and perhaps most pointedly, Title IX’s dual message clearly can be
seen every year, when presidents welcome NCAA champions to the White
House. For example, in 2010, after its second consecutive national championship win, the University of Connecticut Women’s basketball team visited
the White House for its photo opportunity with President Obama. The
President praised the team, as he had done with the 2010 Men’s champion,
stating that
This team has had an unbelievable run . . . seven of the last sixteen NCAA
titles; [s]ix undefeated regular seasons; [f]our undefeated championship
seasons . . . . 39-0 is pretty good.
These women beat their own NCAA record to become the first women’s
basketball team in history to win 78 games in a row over the past two
years, which is just a staggering achievement.196
This photo opportunity illustrates the complex nature of Title IX’s message
to women. On the one hand, the President’s ceremony signaled that women’s athletic accomplishments were just as important as men’s, because the
women’s NCAA champion had been invited to the White House just as the
men’s champion had. Moreover, the president rightly praised the enormous
athletic accomplishment and skill of the team members. On the other hand,
the presidential photo opportunity (and the great ceremony surrounding the
president’s yearly completion of his “March Madness” men’s and women’s
tournament brackets) signals that what is most valued about educationbased athletics is being a highly skilled athlete who is also a winner.
All of this rhetoric by courts, Congress, and government officials is
seemingly in service of Title IX’s message of empowerment. Those highlighting extraordinary female athletic achievement are presumably doing so
with the intent that such rhetoric will communicate that women athletes are
as valued as male athletes, and that profiling high-performing female athletes will inspire greater numbers of women and girls to participate in
sports. While that is certainly one aspect of the message sent by Title IX,
the rhetoric of athletic achievement that has become associated with the law
195
Amateur Sports Act: Hearing Before the Subcomm. on Consumer Affairs, Foreign
Commerce, and Tourism of the S. Comm. on Commerce, Science, and Transp., 104th Cong.
12 (1995) (statement of Norma Cantú, Assistant Secretary, Office for Civil Rights,
Department of Education).
196
Rich Elliott, President Obama Speaks, Conn. Post Blogs (May 17, 2010),
available at http://blog.ctnews.com/elliott/2010/05/17/president-obama-speaks.
146
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has also helped shape the collective understanding197 that sports participation is for those who have both the talent and the means to develop into the
kind of elite athlete that generates institutional prestige and commercial
appeal. In contrast, athletes who participate in sports but resist the demands of the student-athlete culture are not nearly as celebrated in the Title
IX rhetoric or the day-to-day reality of Title IX’s equality mandate. Thus,
Title IX’s deference to educational institutions to define a worthy studentathlete combined with courts’ interpretations and the government’s Title IX
rhetoric reflect and reinforce what now seems to be the natural, largely invisible understandings that make Title IX’s message more complex than it
is assumed. The next part will explore the ways that Title IX’s second message can shape women’s choices to participate, or not, in sports.
c. How Title IX’s Expressive Content Shapes Norms for Sports Participation
Just as Title IX’s message of equality, empowerment and entitlement
to participate in sports has motivated women to participate in sports, so too
can Title IX’s signals about the type of women that can be athletes shape
norms for sports participation. Thus, the message of athletic achievement
and the exclusive conception of who can be an athlete is internalized differently by different groups of women. The first group of women to whom
Title IX speaks are those with the socio-economic means to realistically participate in the prevailing model for education-based sports. These girls and
women enjoy the financial resources, access to facilities, coaching, and parental support necessary to achieve the skill level required of most educational institutions. For these women and girls, Title IX’s message can be at
once empowering and overwhelming, as this group has the means to participate in the prevailing model for sport, but its demands often lead to burnout
and abandonment of sport altogether. The second group of girls and women
to whom the model speaks are those who do not have such resources. For
many of these women, the message sent is that the barriers to participation
are insurmountable. For this group of women and girls, sports participation
is not about being on equal footing with male athletes. For many, it is an
irrelevant indulgence because these girls and women are not on equal footing with their more privileged female counterparts. In this way, Title IX’s
exclusive conception of gender equity in sports can at once empower some
women to participate while discouraging others.
197
Sunstein, supra note 68, at 2050–51 (explaining that the law shapes norms
through, among other things, “clarifying and supporting statements by
politicians”).
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147
Scholars have examined the ways in which the law shapes behavior. As
Richard Pildes has explained, government action does not simply reflect our
collective understandings. It “also shapes and reconstitutes them. Governmental actions can express — and sustain — a reaffirmation or a rejection of
these norms.”198 Importantly, expressive meanings have power when they
“fit with” other community norms and practices.199 There are several explanations for how the expressive content of the law shapes norms and affects
behavior.200 Expressive law scholars have explained that law affects behavior, not just because of the sanctions imposed by the law, but also “by affecting social norms and, consequently, by changing an individual’s preferences
for undertaking particular acts.”201 Law causes individuals to update their
understandings of behavior that will gain community approval or disapproval.202 Because individuals are sensitive to what others think and act to
minimize damage to their reputations, the understandings signaled by the
law will cause individuals to act in accordance, separate from any sanction or
requirement of the law itself.203
The inclination to conform to social norms is particularly strong in the
area of athletics, because sport is a powerful social institution.204 Moreover,
Title IX’s ability to shape norms and affect individual attitudes towards
sports participation is significant because the sheer popularity of the law and
its place in our culture make it a substantial symbol that resonates far beyond its legal sanctions. Such expressive power can convey important attitudes about women’s sports participation that cause women and girls to
internalize205 not just the message of empowerment, but also the message
that the only athletes who are entitled to athletic opportunity and garner
community approval are those who have the socio-economic means and willingness to cultivate and sustain the high level of athletic achievement that is
198
Pildes, supra note 70, at 725, 755.
Anderson & Pildes, supra note 70, at 1525 (“The expressive meaning of a
norm does not inhere in that norm in isolation, but is a product of interpreting the
norm in the full context in which it is adopted and implemented.”).
200
Geisinger, supra note 70, at 35.
201
Id.
202
203
Id. at 339–40.
204
See Note, supra note 87, at 1267 (explaining that the “underlying power of
sport as a social institution” and that “as a socializing agent, sport requires “conformity to certain normative values and behaviors”) (quoting E. Gerber Et Al.,
The American Woman In Sport 406 (1974)).
205
See McAdams, supra note 70, at 343–45 (explaining how approval-seeking
motivates individual behavior).
199
148
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prized by educational institutions and fans.206 Thus, Title IX’s equality,
empowerment and entitlement message has been diluted by Title IX’s second message in two ways. First, the type of opportunities created in the
name of Title IX sends a message that sports participation is only for those
who have the ability and willingness to become highly skilled athletes. Second, Title IX’s empowerment message is diluted because for some communities, such as women of color and lower socio-economic status, the message
sent by the law does not fit within the context of their lives. This results in
a kind of dissonance,207 where many women today interpret the message of
what it takes to be an athlete as a message that athletics is not for them.
The internalization of these messages has measurable consequences.
For those women who have access to sports opportunities, social science data
show that many who try to meet the demands of our education-based sports
culture experience “burnout” and abandon sports rather than try to forge an
athletic identity that differs from the win-at-all-costs norm.208 Many more
women do not participate at all.209 Perhaps most troubling, however, is the
message sent by Title IX that is interpreted as one of exclusion of women
who do not enjoy the resources to access the opportunities that Title IX
provides. Thus, social science data shows that the message of empowerment
and its stimulus to participate is communicated most powerfully to uppermiddle class white women and girls.210 This is through the selection of
206
Olson, supra note 36, at 108 (noting that society “accepts superwomen” athletes with elite talent but not women who want to “play purely for fun” or simply
participate for the sake of participation).
207
Sunstein, supra note 68, at 2035–36 (“[P]eople often try to bring norms into
accord with existing information. When there is conflict between the two, people
may experience dissonance. The result of the dissonance may produce new norms or
new understandings of existing information.”).
208
Koller, supra note 15, at 440–41.
209
Id.; George, supra note 10, at 15–16.
210
For instance, NCAA data for 2009–2010 shows that the overall percentage of
female college athletes who are black is 11.6% and Hispanic is 4%. The overwhelming majority is white. Erin Zgnoc, NCAA, Student-Athlete Ethnicity: 1999–2000 - 2009–2010 NCAA Student-Athlete Ethnicity Report 55
(2010), available at http://www.ncaapublications.com/p-4214-student-athleteethnicity-2009-10-ncaa-student-athlete-ethnicity-report.aspx. See Brake, supra note
59, at 113; Timothy Davis, Race and Sports in America: An Historical Overview, 7 Va.
Sports & Ent. L.J. 291, 308–09 (2008); A. Jerome Dees, Access or Interest: Why Brown has
Benefited African-American Women More than Title IX, 76 U. Mo. Kan. City L. Rev.
625, 636–638 (2008); Alfred Dennis Mathewson, Black Women, Gender Equity and
the Function at the Junction, 6 Marq. Sports L. Rev. 239, 241–43 (1996); Olson,
supra note 36, at 127–28 (“[T]he African-American woman has been largely absent
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149
sports offered by educational institutions and the women who play them.211
For example, nearly all of the sports offered by educational institutions at
the high school and collegiate level for girls and women are those played by
white women with the socio-economic means to cultivate their talent.
These sports are: lacrosse, soccer, softball, volleyball, field hockey, tennis and
golf.212 Black and Hispanic females are largely concentrated in basketball
(32.8% black, 2.5% Hispanic) and indoor track and field (21.5% black and
3.3% Hispanic).213 Moreover, most so-called “emerging sports,” or those
that the NCAA is trying to develop to championship status, typically have
few participants of color or from disadvantaged backgrounds, such as equestrian (0.7% of participants are black and 1.9% are Hispanic) and the formerly “emerging” and now championship sports of rowing (2.8% black and
4.2% Hispanic) and ice hockey (0.4% black and 0.8% Hispanic).214 In contrast, most women of color are clustered into the sport of bowling (40.8 %
black and 2.4 % Hispanic).215
While it is certainly possible that women of color are not “interested”
in sports like lacrosse or soccer and instead choose to focus — when they do
from sport in two ways. First, African-American women are an overwhelmingly
small proportion of those participating in collegiate sports. Second, when they do
participate, African-American women are usually typecast into only a handful of
sports.”). See also Women and Sports in the United States 202 (Jean O’Reilly
and Susan K. Cahn, eds.) (2007) (explaining cultural barriers to sports participation
for Hispanic women and girls); Andrew Ferguson et al., Inside the Crazy Culture of
Kids Sports, Time, July 12, 1999, at 52 (showing the necessary time, equipment and
cost necessary for children to participate in various sports).
211
Brake, supra note 59, at 113 (stating that part of the reason for the disparity
in participation by women of color “is that much of the growth in women’s sports
in recent years has been in sports that are disproportionately played by white
women”).
212
See Zgnoc, supra note 210, at 55. For instance, the most recent NCAA data
show that for women’s soccer, 3.8% of the participants are black, while 5% are
Hispanic. Id. For lacrosse, 2.4% are black and 1.8% are Hispanic. Id.
213
Id.
214
Id; see also Brake, supra note 9, at 114 (“[T]he women’s sports with the most
growth in recent years are the so-called country club or suburban sports, which are
played primarily by girls from suburban, largely white communities and are less
available in urban areas and poorly funded high schools. High-growth sports like
rowing, softball, swimming, and lacrosse frequently require large investments of
time and money outside school and are inaccessible to many students.”).
215
See Zgnoc, supra note 210, at 55. See also Brake, supra note 59, at 114
(explaining that women of color make up the majority of participants in bowling
but that relatively few participation opportunities in bowling have been added in
the last decade).
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participate — on sports such as basketball or track and field, the structural
theory of equality upon which Title IX’s regulations are premised reminds
us that preferences can be socially constructed, so that women are conditioned not to seek athletic opportunities or develop an interest in participation where opportunities seem out of reach. This is the case for many
opportunities offered through Title IX, because the model preferences athletes who are highly trained and skilled, something that generally only
comes from years of private coaching and competitive opportunities that
require substantial parental involvement, enormous financial resources, and
access to training and facilities.216 The best explanation, then, for the fact
that most sports offered by our high schools and universities are played by
white women is that the model for sports offered in the name of equality and
Title IX sends a message to some women that discourages rather than develops their interest in participation. This is particularly true because the critique that Title IX leaves out women and girls who would participate in
sports for recreational reasons and women and girls of color is not new.217
At some point, and for some women, Title IX’s persistent shortcomings
have become one of its messages.
Accordingly, one of the “approval patterns” signaled by Title IX is
that white women with the willingness, talent and means to become highly
skilled athletes are most valued in American education-based sports programs.218 This message carries particular force because of the legitimacy and
moral weight that Title IX enjoys in popular opinion.219 Moreover, the
unique effects of peer pressure on children and teens means that they likely
will not risk trying to change the prevailing norms for sports participation220 but will instead simply reject participation completely. This effect of
discouraging participation is uniquely problematic in the case of women and
girls because there is no stigma for women and girls who fail to participate
in sports. There is, however, a stigma associated with being an athlete who
216
Brake, supra note 59, at 114 (“[M]any of the new women’s sports added in
recent years are sports girls grow up playing in private club and youth sport programs rather than in public schools.”).
217
Olson, supra note 36, at 116, 118, 127–130.
218
McAdams, supra note 71, at 364–66 (stating that legislation reflects public
opinion and approval).
219
See id. at 374 (explaining that legislation carries particular force when the
public believes that the government operates “legitimately”).
220
See Sunstein, supra note 68, at 2033–34 (explaining how social norms affect
risk-taking behavior, especially among young people).
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151
is not talented or “in it to win it.”221 As one gender equity advocate explained, our prevailing sport culture has “unintentionally created [the following] outcomes[:] . . . . sports programs with little diversity with regard
to numbers and types of sports — thereby decreasing the likelihood that
children will be exposed to a sport which matches up to their skills, abilities
and interests” and we have created “a generation of non-participants who
feels that sports participation is only for the most skilled and physically
talented.”222 Indeed, perhaps the most telling reflection of how Title IX’s
mixed message has shaped women’s preferences and behaviors with respect
to sports is research that repeatedly confirms women’s growing interest in
sports as fans. Statistics show that women’s interest in sports in general,
that is, in being a sports fan, is now roughly equal to men’s.223 Thus, while
women’s participation in sports has leveled off, their interest in being a
sports spectator or fan has continued to grow.224 This suggests that opportunities for elite athletes at higher levels such as the college ranks do not
encourage women to participate in sports as much as it engages them in
being a part of the culture that values elite athletic achievement and
strengthens the belief that sports participation is for the talented, privileged
few and not all.
The expressive power of Title IX has therefore taken on a new significance, beyond sending the message that female athletic participation is valued on terms equal to men. By incorporating the norms of the prevailing
model for education-based sport, Title IX sends signals that can discourage
women’s interest in sports participation in that the law incorporates a model
of athletics that is not appealing to or attainable by many women. Although nowhere in the statute and regulations, Title IX is thereby convey221
Of course, the fact that a component of Title IX’s message to women within
our educational institutions emphasizes winning and highly-skilled athletes might
not be a matter of great concern if the model served equally to dampen the interest
of potential male athletes. To some extent, it likely does. However, in my previous
work, I explained how the model can uniquely injure women’s desire to participate
in sports, because the model was constructed by and for the male athlete. See generally Koller, supra note 15.
222
Amateur Sports Act: Hearings supra note 48, at 189-190 (statement of Donna
A. Lopiano, Executive Director, Women’s Sports Foundation).
223
Andrei Markovits, Sports Culture Among Undergraduates: A Study
of Student-Athletes and Students at the University of Michigan, http://
www.andreimarkovits.com/docs/SportsCultureAmongUndergraduates.pdf. ; Rich
Luker, Women are Sports Fans Too, Brandweek, December 2, 1996, at 20 (“Women
are the driving force in the growth in interest in sports in the ‘90s. In 1994, 79%
of all women were fans. That number increased to 85% of women in 1996.”).
224
Markovits, supra note 223; Luker, supra note 223, at 20.
152
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ing the value judgment that the competitive, commercial and elite model of
sports is better than sports for the sake of participation, health and fitness or
simply social reasons. Through the mix of sports and level of play largely
accessible only by white, upper-middle class women, Title IX has conveyed
an exclusive conception of who can be an athlete and implicitly signaled the
judgment that equality for some women is the equivalent of equality for all.
Just as the picture of the typical 1970s athlete as a male deterred women
from playing sports, so too does the stereotypical image of today’s female
athlete. These messages contribute to the “interest paradox,”225 steering
many young women away from sports instead of encouraging them to participate. Accordingly, Title IX’s message of empowerment has been diluted
by the more subtle, but palpable messages about who is entitled to participate in education-based sports programs and what the cost of that participation will be.
IV. POTENTIAL SOLUTIONS
The socio-economic snapshot of education-based sports and the types of
women that benefit most, and least, from Title IX discussed in the previous
section is not a new revelation.226 However, using an expressive theory of
the law provides a fresh way of understanding these outcomes and can therefore enrich our thinking about potential solutions. As a starting point,
then, we must acknowledge that for some women and girls, Title IX’s message is part of the problem and not the solution. Accordingly, the first step
in achieving a solution for the conflicting messages sent about athletics participation to women and girls in the name of Title IX is to recognize that
Title IX cannot and should not be the sole policy for developing women’s
interest in sports. Despite Title IX’s many important successes, it is not a
cure-all and we must not assume that it can provide the type of comprehensive policy solution needed to effectively bring a diverse group of women
and girls into sports and allow them to reap the benefits. Indeed, it is not
realistic or fair to expect that Title IX can continue shaping norms for sports
participation in a way that meets the needs of a diverse population of women. As an anti-discrimination statute, the rights it provides are crucial to
opening the door for women to the world of sports. But while essential,
Title IX is limited. The statute and regulations mandate equality and do
225
See Koller, supra note 15, at 439–47.
See Olson, supra note 36, at 116–19, 127–30 (highlighting the fact that women who simply seek recreation or participation for its own sake as well as women
of color are left out of Title IX’s success story).
226
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153
not articulate any particular content for education-based sports programs.
Accordingly, while Title IX does not allow schools to assume that women
are not as interested in sports as men, it does allow schools to assume that
the only athletes worth providing with equality are those who have the
socio-economic means and desire to assimilate into the model for sports that
predominates in education-based athletics programs. As a result, an equality framework is not enough to develop interest in sports participation
among many groups of women and girls because it has had no power to
check the evolution of sport to the point where the conditions of participation for many women operate as an insurmountable barrier. Those conditions, which favor highly skilled athletes and tend to select for those with
the resources to meet them, send a powerful message in the name of Title
IX, and the message must be changed. Women and girls who would benefit
from sports participation (and, obesity rates show, need it more than ever)
deserve more.
However, in seeking to change the negative messages sent to many
women in the name of Title IX, we need not eliminate or change Title IX.
First, it is clear that for many women, Title IX and its enforcement sends an
inspiring message that does develop interest in sports participation. Title
IX’s message and its substantive guarantees align in a way that resonates for
such women, and for this reason it should not be abandoned or weakened.
And, even if the law has not had as significant an impact on sports participation for some women, its equality message expresses a common understanding of the value of women’s sports participation that should not be
changed.227 Additionally, there is an important consequentialist justification for Title IX. However imperfect the law is, an argument can be made
that it is more beneficial overall to provide athletic opportunity to some
women because doing so makes all women better off. This is the case because having some women achieve the highest levels of sport erodes the
stigma of women’s sports participation and breaks down socially-constructed
stereotypes that serve as barriers to participation for all women.
Moreover, unlike in the Equal Protection context, where laws can be
deemed unconstitutional where they express divisive, hostile or contemptuous messages toward citizens,228 the conclusion that Title IX’s empowerment message resonates with only some, but not all, women and girls does
not mean that Title IX should be eliminated. This is because the failure of
227
See Sunstein, supra note 68, at 2027–28 (explaining that laws can be understood by the public as expressing societal principles and commitments).
228
Anderson & Pildes, supra note 70, at 1533 (explaining the ways in which
Equal Protection doctrine incorporates expressive concerns).
154
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Title IX’s message to inspire and empower some women and girls, and especially of color or lower socio-economic status, arguably is not stigmatizing
them, because there currently is little stigma associated with women and
girls who do not participate in sports. However, an expressive account of
Title IX does reveal that it is perpetuating a kind of expressive harm to such
women by sending messages of exclusion that, with the formidable socioeconomic barriers such women face, serve to deter their participation in
sports. While some scholars suggest that these outcomes are not to be attributed to Title IX,229 it is clear that Title IX’s expressive power has, in the
case of girls and women of color and lower socio-economic status, crossed
the line from simply neglecting these women’s needs to shaping norms for
sports participation that do not include them. Moreover, such long-standing outcomes in the name of Title IX serve to express an attitude that fails
to show equal concern and respect for those left out of Title IX’s success.230
Thus, while the solution is not to eliminate Title IX and its anti-discrimination mandate, we must focus on legal changes that send a consistently empowering message to all girls and women about who an athlete can be.
In doing this, we should create a sport policy that eliminates the dissonance between the message of equality and empowerment for female athletes
and the inequalities that prevent many girls and women from participating.231 We must focus on formulating a policy for education-based sports
programs that shows equal concern and respect232 for all women who are left
229
See Brake, supra note 59, at 115 (“It would be a mistake to blame Title IX
for suppressing sports opportunities for women of color. Title IX did not introduce
racism or racial disparities in access to sports, nor did it worsen these problems.
Rather, the law neglects racial inequality in sports in its quest to equalize women’s
opportunities.”).
230
Alan Strudler, The Expressive Dimension of Governmental Action: Philosophical and
Legal Perspectives, 60 Md. L. Rev. 492, 495–96 (2001).
231
It might be that when Title IX was enacted and its implementing regulations put into place, which sought to change the social meaning behind who an
athlete (based on gender) could be, it was determined that the costs would be too
great to also attempt to change the prevailing model for education-based sports and
the even more entrenched views that sports participation was for winning, not just
participation. See Lawrence Lessig, The Regulation of Social Meaning, 62 U. Chi. L.
Rev. 943, 998 (1995) (“[S]ocial meanings act to induce actions in accordance with
social norms, and thereby impose costs on efforts to transform social norms. They
present, then, a particularly harsh collective action problem, for not only is there
little incentive for an individual to contribute to a new collective good, but there is
a punishment — the cost of deviance — for any individual who wishes to contribute to a new collective good[.]”)
232
See generally Anderson & Pildes, supra note 70; Strudler, supra note 230.
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155
out of sports participation and suffer the consequences. That is, sending a
message that women and girls have the right to participate in sports must
be aligned with norms that value participation for the sake of participation,
and move away from a group-based233 remedy that allows some women to
stand in the shoes for all.
In this respect, a new policy could pick up where Title IX has left off,
by influencing social norms about the meaning and goals of sports participation234 through programs that encourage participation for the many instead
of opportunities for the relatively elite few. Of course, by simply addressing
the issue of sports programs in schools in a way that it never has before,
Congress can send an important signal that sports participation for all children is important. Congress can enhance this message by developing an
education-based sports policy that does several things. First, and most importantly, a new education-based sports policy should move beyond an
equality framework and instead focus on removing barriers to sports participation besides discrimination on the basis of gender. It is no longer enough
to hope for a “trickle down” effect to generate interest in sports participation. While it is true that creating opportunities for women to participate
at the college and university level can spur participation among young girls
by showing that women and girls can be athletes, this is no longer enough.
Significant socio-economic barriers to sports participation mean that many
of today’s elite women athletes do not represent the circumstances and needs
of many potential female athletes. Indeed, the possibility of an opportunity
in college tomorrow means little to a middle school girl who does not have
the means or access to quality sports programs today. Increased public
funding for community-based sports programs and expansion of sports programs into grade schools and middle schools should therefore be a priority.
Title IX’s emphasis on opportunities at the college level comes too late for
the women and girls who have not had the means to develop as athletes in
their childhood. Moreover, opportunities at the college level will always be
too few as compared with those in grade, middle and high schools, which
can potentially touch every individual, not just those with the ability to go
to college.
In addition, institutions receiving federal financial assistance should be
incentivized to create sports programs that appeal primarily to participants
and not simply fans. A new sport policy should reward institutions for find233
See generally Note, supra note 87 (opining that the social policy behind Title
IX demands further efforts to increase overall participation in sports).
234
See Sunstein, supra note 68, at 2026 (“[A]n appropriately framed law may
influence social norms and push them in the right direction.”).
156
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ing ways to create a wide range of sports programs that value commitment,
discipline, social connection and participation over solely spectator appeal
and training for college scholarships, conference championships or the professional ranks. Moreover, creative uses of sports programs which enhance
the educational mission of the school and do not rely on substantial parental
commitments and resources should be favored over programs that require
their athletes to have year-round, private training to be at the level to make
the school team.
To support this, spending on athletic programs at the high school and
college level should be regulated. Such restrictions could include limiting
disproportionate expenditures on certain sports (i.e., football and basketball), or limiting expenditures on recruiting, for instance. Limits could also
be placed on revenue generation through education-based sports programs
or requiring equal funding for men’s and women’s sports programs.
Whatever the specifics, Congress could craft legislation which emphasizes
the academic and health benefits of sports participation and minimizes the
need for schools to attempt to capitalize on the commercial appeal and revenue aspects of athletics that drive the current culture.
In addition, Congress should authorize the Department of Education to
establish pilot programs to experiment with gender integration in education-based sports programs. Gender segregation, especially at the grade
school, middle school and even high school levels of sport is not in most
cases necessary to protect the health and safety of athletes. In contrast, gender integration can have significant benefits in furthering the cause of gender equity in sports. Although many will object that gender integrated
sports teams might further turn women away from sports, it is difficult to
measure what the impact would be because girls are segregated from boys at
the very earliest ages of sports participation. Thus, if girls at a young age
developed their skills alongside boys, fears that girls would be kept off
teams based on talent or driven from sports because boys shut them out
might be unfounded. In addition, if programs emphasized development of
skills and values other than achieving the very highest levels of athletic performance as measured exclusively by the male norm, boys and girls would
have a better chance of playing together safely and equitably. Gender integration in education-based sports programs also would free up resources to
offer more sports teams and opportunities for greater numbers of students to
participate.
Additionally, Congress should address the need for sports participation
opportunities for physically challenged students. The exclusive conception
of who can be an athlete is perhaps seen most clearly in our neglect of physi-
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157
cally challenged individuals, particularly women.235 The Paralympic program as well as programs through the United States military demonstrate
that there are a number of meaningful ways that individuals with disabilities can participate in sports and reap the substantial emotional and physical
benefits. Moreover, a small percentage of high schools are developing opportunities for disabled students to participate in sports, but those opportunities are primarily for boys.236 As it did for women in general with Title
IX, the law has an important role to play in shaping norms for sport participation for individuals with disabilities.
Finally, Congress should set reasonable limits on colleges’ and universities’ ability to run sports programs that train future professional athletes and
Olympians. This group of athletes needs no additional external motivation
for participating and remaining committed to sports. Moreover, organizations such as professional sports leagues and the United States Olympic
Committee can better address issues which might affect participation rates
and talent development. Thus, if we need more Olympic volleyball players
or want athletes to be better prepared for the National Football League, it is
these organizations that should address the issue. College and university
sports should be left to develop programs best suited to educating students.
All of these reforms would be a significant step in the right direction, both
through the actual programs that would be created and affected by them,
and also because it would mean putting the government’s imprimatur on
participation-focused sports programs in schools. This would go a long way
toward sending the message that sports participation is for all and not the
chosen few.
V. CONCLUSION
Decades after Title IX was passed, women and girls still do not participate in sports at rates equal to their male counterparts. Data show that this
is particularly true for women and girls of color and disadvantaged socioeconomic backgrounds. The current theory for the persistent lag in participation rates centers on the continuing presence of discrimination against
female athletes and a culture that devalues the female athlete’s sport experience. The remedy is often said to be greater Title IX enforcement. Yet in
235
See Women and Sports in the United States, supra note 210, at 172–73
(discussing the needs of physically challenged women as an “overlooked issue of
diversity in women’s sport”).
236
Nat’l Fed’n High Sch. Ass’ns, 2009–10 High School Athletics Participation Survey 51, available at http://www.nfhs.org/content.aspx?id=3282.
158
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arguing for more of what Title IX has to offer, we may be missing an opportunity to critically examine the model for sports operating in our educational institutions, and specifically how that model is endorsed by Title IX.
To that end, this Article examined Title IX’s expressive dimension to better
understand how it communicates with potential female athletes and how
this might affect their interest in participating in athletics.
It is apparent that Title IX’s message that women and girls are entitled
to participate in sports on terms equal to men and boys is an essential and
enduring one. However, through its anti-discrimination framework, which
gives substantial deference to educational institutions to structure their athletic programs, Title IX expresses more than just a message of equality and
empowerment. Instead, it signals to potential female athletes that the athletes who are most valued and legitimate are those who meet the demands of
the prevailing student-athlete culture which values winning and spectator
appeal and often requires elite-level talent. These demands serve to filter
out many potential female athletes who do not have the resources or access
to programs which will support their development as athletes. As a result,
the expressive content of Title IX amounts to a mixed message, both telling
women and girls that they should take up sports, but signaling that if they
do, the cost will be high and the potential rewards in terms of participation
opportunities limited. Perhaps most troubling, it signals to some women
and girls that they have little chance to become athletes at all. In this way,
Title IX’s expressive dimension unintentionally can serve to turn girls and
women away from sports, keeping them as far from realizing the benefits of
gender equity as they were before the statute was passed.
A new sport policy can act to change the social construct of educationbased sports so that a message is sent to potential female athletes that more
clearly aligns with Title IX’s message of equality, empowerment, and entitlement to participate. Such a policy should not rely on an anti-discrimination framework, but should instead define the content of education-based
sports programs to include values that will attract the greatest numbers of
women and girls as well as men and boys. Thus, we should not amend or
eliminate Title IX, but supporters of gender equity in sports should work to
augment it, by ensuring that our federally-funded educational institutions
create programs that produce greater numbers of female athletes instead of
simply female athletic fans.
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Transitioning to the NBA: Advocating on Behalf
of Student-Athletes for NBA
& NCAA Rule Changes
Warren K. Zola1
TABLE
I.
II.
III.
IV.
V.
VI.
OF
CONTENTS
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE NBA AND ITS PLAYER ENTRY DRAFT . . . . . . . . . . . . . . . .
THE NCAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE NCAA & NBA EVALUATION PERIOD . . . . . . . . . . . . . . . .
PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
159
163
173
178
191
199
I. INTRODUCTION
The landscape of professional basketball in the United States is in considerable disarray. The most recent collective bargaining agreement (CBA)
between the NBA and its union expired at midnight on July 1, 2011 and
there were genuine disagreements as to the financial viability of the current
1
Assistant Dean, Graduate Programs, Carroll School of Management, Boston
College, Chestnut Hill, MA; MBA, Boston College Carroll School of Management;
J.D., Tulane University; B.A. Hobart & William Smith Colleges, Geneva, NY.
Adjunct Professor and Chair of the Professional Sports Counseling Panel at Boston
College. While any inaccuracies in this Article are mine, and many conversations
shaped this Article, the author would like to specifically thank several key
individuals for sharing their invaluable perspective and insight for this Article:
Aaron Aaker, Shane Battier, Peter Carfagna, Gabe Feldman, Paul Haagen, Marc
Isenberg, Zach Lowe, Michael McCann, Al Skinner, Sonny Vaccaro, and Michael
Zarren.
R
R
R
R
R
160
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league structure.2 Unfortunately for fans around the globe, the NBA closed
its doors for the third time in league history as teams locked out their players just one week after the NBA held its draft.3 The lockout lasted 149 days
as the two sides, led by NBA Commissioner David Stern and National Basketball Players Association (NBPA) Executive Director Billy Hunter, debated the framework in which professional basketball would operate before
agreeing upon a new CBA.4
At the time of this publication it appears that the end result of this
labor strife is that the league will lose approximately a half a billion dollars
and teams will play a 66 game schedule, down from the traditional 82
games, beginning on Christmas Day.5 As a sign of the times, the NBA is
not alone in enduring labor strife. The NFL’s lockout lasted 130 days during the spring and summer of 2011, and both MLB and the NHL are in the
last year of their collective bargaining agreements (CBAs).6
2
NBA Lockout Timeline, LOS ANGELES TIMES, (Nov. 26, 2011, 9:55 AM),
http://articles.latimes.com/2011/nov/26/sports/la-sp-nba-lockout-timeline-201111
27. One of the contentious disagreements has to do with whether or not teams are,
in fact, losing revenue. The NBA claims that 22 teams (out of 30) are losing money
on an annual basis, lending credence to the argument that there may be little incentive for an NBA season under the parameters of the recently expired CBA. Larry
Coon, Is the NBA Really Losing Money?, Espn.com (July 12, 2011, 12:39 AM),
http://sports.espn.go.com/nba/columns/story?columnist=coon_larry&page=NBA
Financials-110630.
3
Id.
4
Tentative Deal Moves the NBA Lockout Closer to End, WALL ST. J. (Nov. 26,
2011, 10:07 AM), http://online.wsj.com/article/AP38298437eeef4ccd8316e337970
17f04.html.
5
Id.
6
The NFL lockout began on March 11, 2011, and ended on July 25, 2011. See
NFL Locks out Players, Who File Suit, Espn.com (Mar. 12, 2011, 4:26 PM), http://
sports.espn.go.com/nfl/news/story?id=6205936; Sources: Deal to end Lockout Reached,
Espn.com (July 25, 2011, 12:14 AM), http://espn.go.com/nfl/story/_/id/6797238/
2011-nfl-lockout-owners-players-come-deal-all-points-sources-say. The current
CBA between the NHL and NHLPA is set to expire on September 15, 2012. See
Liz Mullen, Their Turn: NHL a Year out from Expiration of CBA, SportsBusinessDaily.com, (Sept. 12, 2011), http://www.sportsbusinessdaily.com/Journal/Issues/
2011/09/12/Labor-and-Agents/NHL-CBA.aspx. The CBA between MLB and
MLBPA is set to finish even sooner, on December 11, 2011 although there are
rumors of a tentative deal at the time of this writing. See Bob Nightengale, MLB
May Get Early Start on Labor Deal, Which Expires Dec. 11, USAToday.com, (Feb. 22,
2011, 11:29 PM), //www.usatoday.com/sports/baseball/2011-02-21-mlb-labor-talks
_N.htm.
2012 / Transitioning to the NBA
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161
Many sports fans across the country have spent as much time and energy in the past year reading about court decisions and the intricacies of
labor law as they have watching games. This most recent standoff further
highlights the fact that professional basketball is indeed a business. The
National Collegiate Athletic Association (NCAA) governs intercollegiate
athletics and, as such, defines the rules under which college basketball is
played and operated. While the NBA and its players struggle to negotiate
appropriate rules to govern its operations, the NCAA, which has full control
of its workforce, appears safe from future work stoppages.7
And while NCAA reform is once again a topic of great conversation8
(including a roundtable panel discussion in front of members of Congress),9
so long as student-athletes are not classified as employees and thus unable to
unionize, the NCAA will safely maintain its monopoly on college athletics.10 The revenues for intercollegiate sports continue to rise, as schools
competing in the Football Bowl Subdivision (FBS) generated median revenue of $48 million in 2010.11 While the NCAA does not receive money
directly from football bowl games, the popularity of men’s college basketball allowed it to secure a 14-year, $10.8 billion television rights agreement
with CBS and Turner Broadcasting to cover “March Madness” beginning in
2011.12
7
A legal challenge to the NCAA’s definition of “amateurism” can be found in
the O’Bannon v. NCAA class action lawsuit, now called In re NCAA Student-Athlete Name & Likeness Licensing Litigation, No. C 09-01967 CW, 2011 WL
3240518 (N.D. Cal. Jul. 28, 2011).
8
For the latest article generating much debate on college reform, see Taylor
Branch, The Shame of College Athletics, TheAtlantic.com, October 2011, http://
www.theatlantic.com/magazine/archive/2011/10/the-shame-of-college-sports/8643/.
9
Hypocrisy or Hype? The Impacts of Back-Room Deals, Payoffs, and Scandals in American Collegiate Student Athletics: Before Rep. Bobby L. Rush, Nov. 1, 2011, http://
rush.house.gov/event/hypocrisy-or-hype-impacts-back-room-deals-payoffs-and-scandals-american-collegiate-student.
10
During the beginning of August 2011 the NCAA held a “NCAA Reform
Retreat” as 50 college and university leaders addressed potential changes to the
NCAA. Doug Lederman, New Wave of NCAA Reform?, InsideHigherEd.com
(Aug. 11, 2011), http://www.insidehighered.com/news/2011/08/11/ncaa_presidents
_to_propose_increased_academic_standards_tougher_penalties_more_athletic_aid.
11
NCAA Division 1 Intercollegiate Athletics Report, NCAAPublications.com,
http://www.ncaapublications.com/productdownloads/2010RevExp.pdf (last visited
Oct. 25, 2011).
12
Time Warner Joins CBS in $10.8 Billion March Madness TV Deal, FOXBusiness.com (Apr. 22, 2010), http://www.foxbusiness.com/markets/2010/04/22/timewarner-joins-cbs-billion-march-madness-tv-deal/.
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Clearly the NBA and NCAA, as the overseers of business operations,
are the dominant players in shaping the multi-billion dollar basketball industry in our country. In contrast to NBA players, who have the NBPA to
represent their business interests, college basketball players lack representation. Thus, while NCAA executives, NBA owners, NBA players and the
NBPA govern and negotiate changes in the basketball world, there is no
advocacy group speaking on behalf of those individuals who represent the
sport’s future—student-athletes in college and high school now.
Seen as a fungible commodity with no voice in the direction and operation of their sport, the manner in which college athletes enter the professional market of basketball has significantly deteriorated over the past
several decades. The transition from college to the NBA has become more
fraught with challenges and misinformation than ever before, a fact likely to
lead to a wide range of mistakes by countless student-athletes trying to evaluate whether and when to enter professional basketball.
This Article calls attention to the challenges that men’s college basketball players face when trying to make a fully informed decision as they evaluate whether or not to enter the NBA draft and forgo remaining college
eligibility.13 Unfortunately this difficult decision is not unique to men’s
basketball, but highlights a broader trend showing that colleges, conferences, and the NCAA have done shockingly little to provide guidance and
counsel to student-athletes who are navigating the transition from college to
the professional leagues.14
This Article will address both how we developed the current legal rules
governing the NBA draft and the NCAA’s role in overseeing college athletes. With this recent trend in mind, this Article will then turn its attention to a recent NCAA rule change that unambiguously illustrates the fact
that the best interests of the student-athlete are marginalized, if not ignored, in the process of making the leap from college to the NBA. Finally,
to foster dialogue, this Article will propose solutions on how to address the
hardships college student-athletes face during this transition period.
13
For a wonderful position piece advocating on behalf of student-athletes in the
sport of men’s basketball, see Marc Isenberg, Proposed New NBA Deadline Ignores
Players’ Best Interests, MoneyPlayersBlog.com, http://www.moneyplayersblog.
com/files/bt_com_a16_c_041911.pdf (last visited Oct. 25, 2011).
14
For a comprehensive discussion of this topic, please refer to Glenn Wong,
Warren K. Zola and Chris Deubert, Going Pro in Sports: Providing Guidance to Student-Athletes in a Complicated Legal & Regulatory Environment, 28 Cardozo Arts &
Ent. L. J. 3, 553-607 (2011).
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163
II. THE NBA AND ITS PLAYER ENTRY DRAFT
As is the case for virtually every sport, the process of entering the NBA
is often confusing to those considering this move. Unfortunately, unbiased
guidance to navigate this morass is, for the most part, nonexistent in this
transition process. For college seniors, the NBA entry draft is the day either
when their basketball dreams come true or when they face the harsh reality
that their career in professional basketball – at least in the NBA – may be
over before it even began. The dynamics of this process have changed considerably over the past several decades, as we have seen a decrease in the
number of college seniors selected in the draft and an increase in the number
of underclassmen and European players selected. In fact, over the past six
years (2006 through 2011), a total of 37 seniors have been taken in the first
round of a draft out of a total of 180 selections, meaning that underclassmen
and international players comprise 80% of first round draft picks.15 How
did we arrive at this point? To answer that question, the history and evolution of amateur player distribution in the NBA must be understood.
Strangely enough, professional basketball in America owes its start to
professional hockey, as basketball was originally promoted as a way to keep
hockey arenas filled when home teams were on the road. As hockey gained
popularity in the middle of the 20th Century, ice rink owners considered
different ways to keep their arenas occupied while their hockey teams were
traveling. It was Walter Brown, owner of the Boston Garden, who determined that hosting basketball games would provide the Garden with additional revenue when hockey was not played. This determination led to the
formation of the Basketball Association of America (BAA) on June 6, 1946,
the first professional basketball league in the United States.16
The BAA was comprised of eleven teams and included the Boston Celtics and New York Knickerbockers in its inaugural 1946-47 season.17 In
1949, after three successful years, the BAA merged with a competing
league, the National Basketball League (NBL), and the resulting league was
15
Historical Drafts, TheDraftReview.com, http://thedraftreview.com/index.
php?option=com_content&task=category&sectionid=5&id=15&Itemid=103
16
Zander Hollander, The Modern Encyclopedia of Basketball 281
(Dolphin Books 2d ed. 1979).
17
The teams included the Boston Celtics, Chicago Stags, Cleveland Rebels, Detroit Falcons, New York Knicks, Philadelphia Warriors, Pittsburgh Ironmen, Providence Steamrollers, St. Louis Bombers, Toronto Huskies and Washington Capitols.
See Hollander, supra note 16 at 281.
164
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rebranded as the National Basketball Association (NBA).18 Since that time,
the NBA has been the predominant professional basketball league in the
world. Today it consists of thirty franchises scattered throughout North
America.19
Notwithstanding the recent labor dispute, the league has enjoyed surging popularity with fans around the world over the past several decades.
Innovative global marketing, rule changes, visionary leadership, technology
advances and colorful individuals have helped professional basketball grow
into a financial success. Individual teams claim to be struggling financially
as expenses rise, yet the league announced that an audit of the 2010-11
financials showed there was a 4.8% increase in basketball related income
(BRI) this past year, bringing league revenues to $ 3.82 billion—up from $
3.65 billion for the 2009-10 season.20 This audit found that average player
salary rose to $ 5.2 million this past year and total player compensation was
$ 2.18 billion, making 2011 the sixth consecutive season of salary
increases.21
Having an audience, both in person and on television, is what generates revenue, and close competition draws in more viewers.22 The success of
any league is largely determined by competitive balance—the concept that
the outcome of a particular game is unknown at the onset, thereby sparking
interest in fans to watch the contest. While a variety of factors go into a
team’s ability to compete, the most important factor is the skills of the
individual players who compete. Accordingly, the allocation of this talent is
the lifeblood that helps ensure and maintain a league’s competitive balance—and, thus, its popularity.
While the concept of competitive balance is widely accepted as necessary, the manner in which to best distribute amateur talent to specific teams
18
Hollander, supra note 16.
Teams, NBA.com, http://www.nba.com/home/teams/ (last visited Oct. 25,
2011).
20
John Lombardo, NBA Reports Increase in Salaries, Basketball-Related Income for
‘10-11, SportsBusinessDaily.com (July 25, 2011), http://www.sportsbusiness
daily.com/Daily/Morning-Buzz/2011/07/25/NBA-Finance.aspx?hl=basketball%20
financials&sc=0.
21
Id. Perhaps a fairer way to evaluate the distribution of money to players
would be median, rather than mean, salary in the NBA, which is “only” $ 2.3
million. Steve Aschburner, NBA’s ‘Average’ Salary - $5.15M – A Trendy, Touchy
Subject, NBA.com (Aug. 19, 2011, 11:03 AM), http://www.nba.com/2011/news/
features/steve_aschburner/08/19/average-salary/index.html.
22
Henry Abbott, What Good is Parity?, ESPN.com, (June 21, 2011, 4:30 PM),
http://espn.go.com/blog/truehoop/post/_/id/30539/what-good-is-parity.
19
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165
has always been a challenge for professional sports leagues.23 This is true
both legally under antitrust and labor law as well as strategically, as leagues
seek the fairest way to ensure an appropriate allocation of talent amongst all
competing teams. The solution, now widely accepted in professional sports
leagues, is the amateur entry draft. This draft allows existing teams to select
new players with whom they may replenish their teams’ talent pools. As the
talent and skills of older players erode, younger players are brought in to
replace them, allowing the league to maintain competitive balance.24
Of course, the draft mechanism causes tension between the league and
its players as it limits amateur players from negotiating with multiple
teams, thereby intentionally keeping salaries below free market rates. Under
the rules of every professional sports’ league draft, a single team is granted
the exclusive rights to negotiate with the players it selects. If a drafted
player doesn’t want to play for that team or live in that particular city under
the proposed financial package offered, that player may “hold out,” but
under no circumstances is he allowed to negotiate with other teams.
Not surprisingly, this player restraint has led a number of players to
bring legal challenges under antitrust law over the past several decades, attacking player entry drafts as illegal restraints of trade.25 Despite these challenges, however, it appears drafts themselves will remain part of the
landscape of professional leagues for the foreseeable future.26 What has
emerged from this litigation is a careful balancing test between the pro- and
anti-competitive effects resulting from this restraint of trade.27 The result
has been a sharp decrease in the number of draft rounds and the length of
time a team can retain exclusive players’ rights before allowing them to
23
This is chronicled in a number of legal challenges against professional sports
league drafts. See, e.g., Denver Rockets v. All-Pro Mgmt., 325 F. Supp. 1049 (D.
Cal. 1971) (player brings suit against age eligibility requirement for the NBA
draft); Robertson v. National Basketball Ass’n, 556 F.2d 682 (2d Cir. 1977) (antitrust lawsuit filed by player against the NBA’s draft system); Clarett v. NFL, 306 F.
Supp. 2d 379 (S.D.N.Y. 2004), rev’d, 369 F.3d 124 (2d Cir. 2004), cert. denied, 125
S. Ct. 1728 (2005).
24
For a more thorough discussion on competitive balance and the role of player
drafts see Scott R. Rosner & Kenneth L. Shropshire, THE BUSINESS OF SPORTS.
(Jones & Bartlett Learning 2d ed. 2011). Chapter 2, Leagues: Structure & Balance.
25
See supra note 23 and accompanying text.
26
As of the time of this Article, the CBAs for professional baseball, basketball,
football, and hockey all have provisions for player entry drafts moving forward.
27
The “rule of reason” was developed by the Supreme Court in 1911, in Standard Oil Co. of N.J. v. United States. See 221 U.S. 1 (1911) (holding only combinations and contracts that unreasonably restrain trade are illegal under antitrust laws).
166
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enter free agency.28 Player unions have, for the most part, accepted these
stipulations as they reduce the perceived restraint on free markets and have
been reached as a negotiated component of CBA discussions.29
As the summer of 2011 illustrated with lockouts in both basketball
and football, the business of professional sports leagues has radically changed
in the past century. The power of players—through their unions—has
grown dramatically, primarily as a result of the expanded role of collective
bargaining. When the NBA was created in 1949, there was no players’
union. The National Basketball Players Association (NBPA) was formed in
1954.30
Bob Cousy, a Hall of Fame point guard and member of the Boston
Celtics, was a driving force behind the development of the NBPA. Cousy
identified an established player from each NBA team and urged those selected to begin to act in solidarity.31 Armed with their support, Cousy met
with NBA President Maurice Podoloff before the 1955 NBA All-Star Game
and shared a list of the player’s’ concerns.32 Podoloff promised various improvements in playing conditions, the creation of a pension plan, and the
acknowledgment of the legitimacy of the union.33 Unfortunately, the players’ demands were ignored as Podoloff stalled the implementation of these
promises.34 Finally, Cousy contacted AFL-CIO leadership about the creation
of a union.35 At that point, the league relented and began to bargain in
good faith. Finally, in 1957, the first NBA CBA was executed.36
28
Steve Aschburner, As NBA Draft Grows Increasing Specialized, Uncertainty Remains, SPORTS ILLUSTRATED (June 8, 2009, 11:06 AM), http://sportsillustrated.cnn.com/2009/writers/steve_aschburner/06/08/draft.process/index.html. See
also Zach Lowe, Does NBA’s ‘Franchise Tag’ Do Enough to Help Incumbent Teams,
SPORTS ILLUSTRATED (Nov. 23, 2011, 11:07 AM), http://nba-point-forward.si.
com/2011/11/23/does-nbas-franchise-tag-do-enough-to-help-incumbent-teams/.
29
The NHL CBA settlement in 2005 included the negotiation of the reduction
of two rounds in the entry draft—from nine to seven. See Collective Bargaining FAQs,
NHL.com, http://www.nhl.com/ice/page.htm?id=26366 (last visited October 29,
2011).
30
About the NBPA, NBPA.org, http://www.nbpa.org/about-us (last visited Nov.
7, 2011).
31
Robert Bradley, Labor Pains Nothing New to the NBA, APBR.org, http://www.
apbr.org/labor.html (last visited Oct. 4, 2011).
32
Id.
33
Oscar Robertson, The Big O: My Life, My Times, My Game, 179-80 (2003).
34
Id.
35
Id.
36
Id.
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167
Because the NBA formed without a vehicle for negotiations between
the league and its players, the league was able to unilaterally devise the
initial draft system.37 Thus, until 1957, teams in the NBA continued selecting players until the clubs determined that there was no one else worthy
of being picked.38 The second iteration of the draft came when the “round”
system was instituted in 1957.39 Under this scheme, the draft consisted of
between fourteen and twenty-one rounds.40 This iteration lasted until 1961.
In 1962, a unique draft mechanism called the “territorial choice” system was introduced with the intention of sparking local interest in the
NBA. The “home market” of an NBA team was defined as being within a
fifty-mile radius from its home arena.41 Any player who played in college
within that geographic area could be selected by the home team if the team
chose to forfeit its first round pick.42
This territorial concept was successful. By 1966, teams had made
twenty-two territorial picks; eleven of those individuals have been inducted
into the Naismith Memorial Basketball Hall of Fame, including notable
players such as Tom Heinsohn, Wilt Chamberlain, Oscar Robertson, and
Jerry Lucas.43 In 1965 Bill Bradley was the last player selected under the
territorial pick system.44 By 1966, after watching Red Auerbach and the
Boston Celtics win eight consecutive NBA championships, the league eliminated the territorial pick system and modified the allocation of amateur
players by formally adopting a straight, ten round draft.45
In addition to the territorial choice system, the league also implemented age eligibility rules. In 1961 the NBA unilaterally instituted a rule
37
See supra note 30.
John C. Graves, Controlling Athletes with the Draft and Salary Cap: Are Both
Necessary?, 5 Sports L. J. 185, 187 (1998).
39
Id.
40
Id.
41
Peter A. Coclanis & Alex Coclanis, Home Cooking: Reliving the NBA’s Territorial
Draft, Slam Online (June 21, 2011, 4:08 PM), http://www.slamonline.com/online/nba/2011/06/home-cooking/.
42
Id.
43
Id.
44
Id.
45
Michael A. McCann, Illegal Defense: The Irrational Economics of Banning High
School Players from the NBA Draft, 3 Va. Sports Ent. L.J. 126 (2004). See also Percy
Allen, How the NBA Draft Became a Lottery, The Seattle Times, May 21, 2007, http:/
/seattletimes.nwsource.com/html/nba/2003715404_lotterytimeline21.html. Also
taken from NBA webpage highlighting NBA draft history – now taken down during lockout.
38
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requiring that “a player could not make himself available” for the draft
until four years after his high school graduation.46 These rules came under
fire when Spencer Haywood brought suit against the league, claiming the
requirement was a restraint of trade.47 Because this age requirement was
never collectively bargained, Haywood claimed that this rule was a clear
violation of antitrust law.48 Ultimately, in 1971, the District of California
agreed with Haywood, finding that the age requirement was a per se illegal
boycott.49 This debate as to whether sports leagues can mandate a minimum age requirement has continued over the past 40 years.50
As a result of Haywood’s lawsuit, a “hardship draft” was conducted in
1972 for individuals who could show financial hardship.51 After one year,
this supplemental “hardship draft” was eliminated, and beginning in 1973,
anyone wishing to declare hardship was automatically included in the regular draft.52 Finally, in 1976, the hardship requirement was eliminated entirely and the “early entry” procedure was adopted.53 This provision
allowed any athlete with college eligibility to enter the NBA draft by sending the Commissioner a letter formally forfeiting his remaining NCAA eligibility at least forty-five days before the draft.54 As a result, three high
school players, Moses Malone, Darryl Dawkins, and Bill Willoughby, entered the NBA draft in the 1970s.55 While all three of these players enjoyed
46
Graves, supra note 38.
Denver Rockets, 325 F. Supp. at 1049.
48
Id.
49
Id.
50
For a more thorough law review article on this topic, see Michael McCann &
Joseph Rosen, Legality of Age Restrictions in the NBA and the NFL, 56 Case W. Res.
L. Rev. 731 (2006).
51
Graves, supra note 38, at 193. See also Legends Profile: Spencer Haywood, NBA.
com (Aug. 9, 2011), http://www.nba.com/history/legends/spencer-haywood/index.
html, [hereinafter Legends Profile]; John Rohde, Sonic’s Spencer Haywood Helped Clear
the Way for Kevin Durant, NewsOK.com, (Jan. 11, 2010), http://newsok.com/johnrohde-sonics-spencer-haywood-helped-clear-path-for-kevin-durant/article/3431142.
52
Legends Profile, supra note 51.
53
Graves, supra note 38, at 193.
54
Legends Profile, supra note 51.
55
Chris Broussard, Why Pros Spent 20 Years Shunning High Schoolers, N.Y. Times,
(Nov. 16, 2003), http://www.nytimes.com/2003/11/16/sports/why-pros-spent-20years-shunning-high-schoolers.html.
47
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169
success in the NBA, it would be 20 years until the next high school student
would bypass college for the NBA draft.56
The 1983 CBA reduced the draft was from ten to seven rounds, beginning in 1985.57 The 1985 draft was also the first year the league instituted
a “draft lottery” in which the worst seven teams (as determined by NBA
records the previous year) were entered to determine the first seven picks in
the draft.58 This modification was devised to address the perception that
teams were intentionally losing games at the end of the season to enhance
their draft prospects.59 Finally, as negotiated in the 1983 CBA, the number
of rounds in the draft was further reduced to three rounds in 1988 and to
the current two round system beginning in 1989.60
While the “modern” NBA draft rules have been in place since 1989,
how NBA franchises use the draft has changed significantly since then. The
largest shift is that teams have moved away from selecting college seniors,
instead looking at “upside” and “potential” when evaluating draft prospects. In 1995, twenty years after Malone, Dawkins and Willoughby skipped college; Kevin Garnett followed their path and entered the NBA draft
directly from high school.61 He was followed in 1996 by Kobe Bryant and
thereafter by Amar’e Stoudemire, Dwight Howard and LeBron James, just
to name a few of the most visible of the NBA stars who entered the NBA
directly from high school in the decade between 1995 and 2004.62
56
Bob Carter, ‘Da Kid’ Progressed Quickly, ESPN Classic, http://espn.go.com/
classic/biography/s/Garnett_Kevin.html.
57
1983 Collective Bargaining Agreement, National Basketball Association,
art. X.
58
Id.
59
McCann, supra note 50 at 126. See also Graves, supra note 38, at 193.
60
See 1983 Collective Bargaining Agreement, supra note 57.
61
Shawn Kemp was actually drafted by the NBA in 1989 without playing college basketball as well. He verbally committed to the University of Kentucky during his senior year of high school. However, allegations of theft kept him away
from Kentucky and he enrolled in Trinity Valley Community College in Texas for
one semester. He did not play basketball there and submitted his name for the
NBA draft in 1989, when he was chosen by the Seattle Supersonics with the 17th
overall pick in the first round. Sports People; Kemp Leaves Kentucky, N.Y. Times (Nov.
8, 1988), http://www.nytimes.com/1988/11/08/sports/sports-people-kemp-leaveskentucky.html?pagewanted=1; Shawn Kemp NBA & ABA Statistics, BasketballReference.com, http://www.basketball-reference.com/players/k/kempsh01.html
62
NBA Draft History, NBA.com (Aug. 16, 2011, 09:51 AM), http://www.nba.
com/history/draft/index/index.html.
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Kevin Garnett, after earning MVP honors during the 2004 NBA AllStar game, stated “I want to thank Spencer Haywood. . .for leading the way.
Without Spencer Haywood there would be no Bill Willoughby, Darryl
Dawkins, Moses Malone or myself.”63
The success of these players who skipped college to go straight to the
NBA created a wave in which a total of thirty-nine players were drafted by
the NBA immediately out of high school between 1995 and 2005.64 As this
process evolved, and more and more early entrants declared for the NBA
draft, the focus of talent evaluation shifted sharply. While other factors
certainly play a role, it is glaringly obvious that player evaluation for the
draft is now heavily focused on a young player’s potential rather than the
talent and maturity that a player displays in the college game.65 General
managers are now loathe to bypass a young player in the draft who may turn
into an all-star within a few years but often skip more seasoned college players, rationalizing that those college players have already reached their potential. The unfortunate byproduct of this paradigm shift is that each year a
student-athlete plays in college, his value actually decreases as he loses the
ability to claim “upside” or “potential.”66
Amidst the increase in players bypassing college for the NBA, the
league’s Commissioner David Stern publicly argued for an age limit of
twenty before an individual could be draft eligible.67 Certainly the NCAA
was in favor of high profile basketball stars being diverted to college, as
having them on campus would help the NCAA’s visibility and increase the
value of its basketball media rights.68 Therefore, the NBA paid careful attention when Maurice Clarett challenged the NFL’s draft eligibility rules in
63
Jayda Evans, A Long Rise Back for Spencer Haywood, Seattle Times, (Feb. 25,
2007), http://seattletimes.nwsource.com/html/nba/2003588104_haywood250.html.
64
Nicholas E. Wurth, The Legality of an Age-Requirement in the National Basketball League After the Second Circuit’s Decision in Clarett v. NFL, 3 DePAUL J.SPORTS
L.& CONTEMP.PROBS. 103 (2005).
65
A wonderful article describing the radical shift to drafting “tremendous upside” was written in 2005. Bill Simmons, What the TUP is Going On?, ESPN.COM
(June 27, 2005, 11:20 AM). http://sports.espn.go.com/espn/page2/story?page=simmons/050627&num=0.
66
Sam Amico, Once Again Seniors Slide in the NBA Draft, FOXSPORTS.COM
(May 23, 2011, 11:26 AM). http://www.foxsportsohio.com/msn/05/23/11/Will-seniors-be-pushed-back-in-the-draft/landing_cavaliers.html?blockID=527538.
67
Stern Wants NBA Age Limit Raised to 20, ESPN.com (Apr. 13, 2005, 9:38
PM), http://sports.espn.go.com/nba/news/story?id=2035132.
68
History of Basketball, ThePeopleHistory.com, http://www.thepeoplehistory.
com/basketballhistory.html (last visited Oct. 25, 2011).
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171
2003.69 In his lawsuit, Clarett challenged the requirement that a player be
three seasons removed from high school before becoming draft eligible as
violating § 1 of the Sherman antitrust laws.70 When the Second Circuit’s
decision to strike down the district court’s decision and uphold the NFL
draft eligibility rules was released in 2004, the NBA and NBPA were quick
to meet and negotiate.71
In 2005 the NBA and NBPA ultimately agreed upon a provision,
which was then incorporated into the league’s CBA, for the 2006 draft requiring that a player be “at least nineteen years of age during the calendar
year in which the Draft is held.”72
This provision set the age requirement for the NBA. Because it had
been collectively bargained, the labor exemption protects it from future legal challenges. This provision, however, only applies to players from the
United States, as the NBA defines draft eligibility slightly differently for
international players.73 With respect to players from the United States, the
CBA states:
“Players who are 19 years or older and are one year removed from high
school graduation are automatically eligible for the NBA draft if they
meet any of the following criteria:
1. They have completed four years of their college eligibility;
2. They graduated from high school in the United States; did not
enroll in a U.S. college or university, and four years have passed
since their graduation or, if they did not graduate, their high
school class graduated;
3. They have signed with a professional basketball team outside of
the NBA, anywhere in the world, and have played under that
contract.”74
While this Article does not focus on the rules regarding international players, they are generally automatically eligible for the NBA draft if:
1. They are 22 years old during the calendar year of the draft; or
69
Clarett v. NFL, 306 F. Supp. 2d 379 (S.D.N.Y. 2044), rev’d, 369 F.3d 124
(2d Cir. 2004), cert. denied, 125 S.Ct. 1728 (Apr. 4, 2005).
70
Id. at 390.
71
Kevin J. Cimino, The Rebirth of the NBA – Well, Almost: An Analysis of the
Maurice Clarett Decision and Its Impact on the National Basketball Association, 108 W.
Va. L. Rev. 830 (2006).
72
2005 Collective Bargaining Agreement, National Basketball Association,
art. X § 1(b)(i).
73
Id. at art. X § 1(g).
74
Id. at art. X § 1(b)(ii).
172
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2. They have signed a contract to play professional basketball outside
of the NBA but within the United States, and played under that
contract.75
Since this provision was passed in 2005, fifty-two international players have
declared for the NBA draft.76 Here is the breakdown for each year:
2005
11
2006
10
2007
6
2008
5
2009
9
2010
5
2011
6
Additional draft rules state that if a player, domestic or international,
is drafted, the rights to that player are held by the team for one calendar year
after the draft.77 Should the player sit out one year without signing a contract, he is automatically reentered into the NBA draft. If an individual sits
out another full year after the second draft then he is declared a free agent.78
The age requirement has become known as the “one and done rule”
and has radically changed college basketball.79 The NBA rule essentially
mandates that every domestic basketball player go to college where he must
abide by the rules and regulations of the NCAA.80 This “one and done”
rule does not consider whether the college environment is right for every
player.
75
Id. at art. X § 1(b)(ii)(G).
International Early Entry Players who Remained in the Draft, RealGM.com,
http://basketball.realgm.com/nba/draft/early_entry/by_type/International/
Early_Entrants (last visited Aug. 18, 2011).
77
See 2005 Collective Bargaining Agreement, supra note 72, at art. X § 4.
78
Id. at art. X § 3(b).
79
For an essay thoroughly examining age eligibility rules in the NFL and NBA,
refer to Michael A. McCann and Joseph S. Rosen, Legality of Age Restrictions in the
NBA and the NFL, 56 Case W. Res. L. Rev. 731 (2006).
80
One notable exception is Brandon Jennings, who, after graduating high school
in 2007, spent the 2008 season playing professionally overseas before returning to
the NBA in the 2009 NBA Draft. Chris Broussard, Exchange Student, ESPN.COM
(Dec. 8, 2008, 9:44 AM), http://sports.espn.go.com/espnmag/story?id=3715746.
The other interesting example of taking this rule to the extreme was the case of
Jeremy Tyler—a high school standout from San Diego who decided after his junior
year to play overseas in 2009. This decision meant that he would be paid for two
years and then was draft eligible for the 2011 draft—selected in the 2nd round by
the Charlotte Bobcats. See Pete Thamel, Basketball Prospect Leaving High School to
Play in Europe, N.Y. Times (Apr. 22, 2009), http://www.nytimes.com/2009/04/23/
sports/ncaabasketball/23prospect.html.
76
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173
III. THE NCAA
College athletics have evolved considerably in the past century, as have
the rules governing participation and competition for student-athletes. The
impetus behind regulating college sports began when President Theodore
Roosevelt’s son Ted broke his collarbone while playing football for Harvard
University in 1905.81 This injury brought to President Roosevelt’s attention the number of serious injuries sustained during athletic competition at
the intercollegiate level. Consequently, President Roosevelt conducted
meetings at the White House in which he urged the presidents of Harvard,
Princeton, and Yale to address the issue of athlete safety.82 As a result, the
Intercollegiate Athletic Association of the United States (IAAUS) was established on March 31, 1906, and in 1910 the IAAUS became the National
Collegiate Athletic Association (NCAA).83
The NCAA defines itself as “a voluntary organization through which
the nation’s colleges and universities govern their athletics programs.”84
The NCAA is comprised of member schools, each of which is categorized
into one of three Divisions (I, II, and III). Schools often further align themselves into conferences to create a sense of stability and further alliance
among, at least historically, similarly situated institutions of higher learning.85 While the landscape of conference memberships has changed over
time, a conference is still, as defined by the NCAA, merely a “group of
colleges and/or universities that conducts competition among its members
and determines a conference champion in one or more sports.”86
81
John J. Miller, The Big Scrum: How Teddy Roosevelt Saved Football
(2011) (chronicling the President’s efforts to save college football through the creation of the NCAA).
82
See id.
83
NCAA History NCAA.ORG. http://www.ncaa.org/wps/wcm/connect/public/
NCAA/About+the+NCAA/Who+We+Are/About+the+NCAA+history (last
visited Nov. 28, 2011).
84
About the NCAA, NCAA.org, http://www.ncaa.org/wps/portal/ncaahome?
WCM_GLOBAL_CONTEXT=/ncaa/NCAA/About+The+NCAA/index.html
85
For an interesting history of NCAA conference realignment, refer to History of
Conference Realignment, NBCSports.com, http://nbcsports.msnbc.com/id/37689691/
(last visited Oct. 9, 2011)
86
NCAA Academic and Membership Affairs Staff, NCAA, 2011-12 NCAA Division I Manual (2011) [hereinafter DI Manual], available at http://www.ncaapublications.com/productdownloads/D112.pdf.
174
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Since the NCAA’s inception in 1910, large numbers of student-athletes at colleges and universities across the country have dreamt of pursuing
a career in professional athletics. With the growth of technology, the visibility of professional athletes has soared over the past century. Correspondingly, the expansion in the popularity of professional athletics, domestically
and internationally, has translated into greater interest on behalf of students-athletes in entering the professional leagues.
The NCAA governs college eligibility and the concept of amateurism
for all student-athletes for every college and university across the country.87
Because the NCAA is a non-profit with voluntary membership, its ability to
impose rules and restrictions on student-athletes is virtually absolute.88 The
2011-12 Division I NCAA Manual consists of 426 pages of operating and
administrative bylaws that define the manner in which all college players
must: 1) gain initial eligibility; 2) maintain their academic and athletic eligibility; 3) follow the constraints of the NCAA’s self-defined “amateur”
status; and 4) continue to represent their university and the NCAA on the
court.89
One important caveat is that the NCAA is not a centralized governing
body. Rather, the “NCAA” is truly a membership. While its headquarters
may implement rules and policies, by and large the people who work for the
NCAA are merely implementing policies created and pushed forward on
behalf of the member institutions.90 It has become easy to blame the NCAA
officials who enforce its policies, despite the fact they often individually
oppose those policies. But it is the colleges themselves that have fashioned
and allowed this system to evolve. Higher education thus has no one to
blame but itself for the burdensome regulations imposed—not some bureaucracy in Indianapolis.
Under the auspices of protecting amateurism, the NCAA membership
has very clearly established lines that define the rules by which all studentathletes who transition from college to professional athletics must abide if
87
Id.
NCAA’s Tax-Exempt Status, NCAA.org, http://www.ncaa.org/wps/wcm/connect/public/NCAA/Issues/Commercialism/NCAAaxx̃empt§tatus (last visited Oct.
9, 2011).
89
These specific principals are discussed in the DI Manual, both in Article 1.2
(Purposes) and Article 2 (Principles for Conduct of Intercollegiate Athletics). See DI
Manual, supra note 86, at 1.2.2.
90
How We Work: NCAA Membership & the National Office. NCAA.ORG. http://
www.ncaa.org/wps/wcm/connect/public/ncaa/about+the+ncaa/how+we+work/
ncaa+membership+and+the+ncaa+national+office.
88
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175
they are to maintain their NCAA eligibility.91 Any player who hopes to
play in the NBA must comply with these rules, as NBA rules now force
players to attend a minimum of one year of college.92
Because of this one-year requirement, colleges and universities face an
increasing number of student-athletes whose sole reason for attending school
is to build their brand and pass the time before declaring for the NBA
draft.93 The NCAA acknowledges this reality and, to its credit, has developed policies that define how these individuals may evaluate their NBA
prospects while maintaining their college eligibility should they so choose.
The NCAA rules governing men’s basketball players and the NBA
draft have been modified over time, partly in response to changes in the
NBA’s collective bargaining agreement. What has remained consistent,
however, is that a basketball player may “inquire of a professional sports
organization about eligibility for a professional-league player draft or request information about the individual’s market value without affecting
his. . .amateur status.”94 Thus, under NCAA rules, a men’s basketball
player may always contact the NBA to determine his draft status.
While student-athletes may inquire about their draft status at any
time, their ability to declare for the draft while retaining their collegiate
eligibility is an entirely different story. This distinction is of critical importance is because NBA teams often don’t evaluate potential prospects until
they declare themselves draft eligible. With approximately 4,100 students
participating in Division I men’s college basketball across the country every
year, NBA teams simply cannot adequately scout all potential players until
they know who is coming out in any given year.95 Thus, the only way to
91
Id.
2005 Collective Bargaining Agreement, supra note 72, at art. X § 1(b)(i). Note
that this could change with the new collective bargaining currently underway between the NBA and the NBPA.
93
Zack Lowe, Age Limit on Back Burner in Labor Negotiations, http://nba-pointforward.si.com/2011/11/02/age-limit-on-back-burner-in-labor-negotiations/
?sct=hp_wr_a2&eref=sihp (last visited Nov. 3, 2011). One recent example of a
student-athlete being forced to attend college because of the “one and done” rule
was Kansas University’s Josh Shelby. Pat Forde, Josh Selby Story Exposes One-andDone, ESPN.com (April 22, 2011), http://sports.espn.go.com/ncb/columns/story?
columnist=forde_pat&id=6407176.
94
DI Manual, supra note 86 at 12.2.4.1 (Draft and Inquiry).
95
There are 344 schools competing in Division I men’s basketball and approximately 12 players per team. Thus, dividing by four, there are approximately 1,032
college seniors each year, to say nothing of the international evaluation necessary as
well. 2011-12 Division I Men’s Basketball. NCAA.ORG. http://stats.ncaa.org/
team/inst_team_list?sport_code=MBB&division=1.
92
176
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gauge a player’s true professional potential is to declare for the draft while
following NCAA rules so that he doesn’t lose his amateur eligibility.
The NCAA’s strict time constraints further restrict a player’s ability to
make an informed decision about his future. The NCAA has radically
changed the deadline for pulling one’s name out of the draft in a way that
shows power resides with the college coaches—not with university presidents, athletic directors or the NCAA officials, each of whom may be more
concerned with evaluating what is in the “best interests of the studentathlete.”96
The NCAA imposes few restrictions on student-athletes before they
enroll in college basketball. One such rule generically states:
“[a]n individual shall be ineligible for participation in an intercollegiate
sport if he or she has entered into any kind of agreement to compete in
professional athletics, either orally or in writing, regardless of the legal
enforceability of that agreement.”97
One other requirement imposed on student-athletes before enrollment
has to do with professional representation. The NCAA has rules related to
agents for all sports that specify when selecting a professional agent for representation causes a student-athlete to permanently lose his or her college
eligibility.98 The general amateurism rules regarding agents apply to all
student-athletes and clearly states that an athlete will permanently lose his
or her eligibility should he or she agree—either verbally or in writing—to
be represented by an agent.99
While the rules regarding agents are steadfast, an exception has
evolved when securing advice about a proposed professional contract in either baseball or hockey.100 Because the MLB and NHL allow individuals to
be drafted directly out of high school,101 the NCAA has developed a distinction in its rules that allows a student-athlete and his parents to “receive
advice from a lawyer or other individual concerning a proposed professional
96
Eamonn Brennan, The New NBA Draft Deadline is Ridiculous. ESPN.COM.
http://espn.go.com/blog/collegebasketballnation/post/_/id/30366/the-new-nbadraft-deadline-is-ridiculous.
97
DI Manual, supra note 86 at 12.2.5 (Contracts and Compensation).
98
See id. at 12.3 (Use of Agents).
99
Id.
100
DI Manual, supra note 86 at 12.3.2 (Legal Counsel).
101
Collective Bargaining Agreement Between National Hockey League and National
Hockey League Players’ Association (July 22, 2005), 17 (8.4 Eligibility for Claim); First
Year Player Draft: Official Rules, MLB.com, http://mlb.mlb.com/mlb/draftday/
rules.jsp (last visited Nov. 7, 2011).
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177
sports contract.”102 However, this “advisor” is not allowed to represent the
individual directly in negotiations over the contract.103
This advice provision means that a player selected in either the MLB or
NHL draft is allowed to have a lawyer review a proposed contract, but the
lawyer may not represent the individual during any negotiations to improve
the terms of the deal. Any direct contact (defined as any conversation in
person or phone, text message, or email) with a professional sports team
immediately turns the advisor into an agent under NCAA rules, thereby
making the student-athlete ineligible.104 If an individual receives assistance
from an advisor, the student-athlete is required to pay him or her “normal
rate” for such services.105 Unfortunately, the NCAA has not yet decided to
allow advisors in the sport of men’s basketball.
With respect to the NBA draft, NCAA rules draw a firm line for players. After enrolling in college:
“An individual loses amateur status in a particular sport when the individual asks to be placed on the draft list or supplemental draft list of a professional league in that sport, even though:
1. The individual asks that his name be withdrawn from the draft
list prior to the actual draft;
2. The individual’s name remains on the list but he or she is not
drafted; or
3. The individual is drafted but does not sign an agreement with any
professional athletics team.”106
102
DI Manual, supra note 86 at 12.3.2 (Legal Counsel). Also, the NCAA sends a
letter to all individuals who compete in either baseball or men’s ice hockey that
clearly explains their definition of “advisors.” For an example, see Rachel NewmanBaker and Steve Mallonee, Memorandum to Men’s Ice Hockey Student-Athletes with Remaining Eligibility, NCAA (Mar. 17, 2011), available at http://graphics.fansonly.
com/schools/mwc/graphics/pdfs/compliance/032211-nhl-ed-doc.pdf.
103
DI Manual, supra note 86 at 12.3.2 (Legal Counsel). In an interesting case, a
baseball player had an advisor who directly negotiated with a baseball team in violation of these direct NCAA rules. Ultimately, he was deemed to be ineligible. He
appealed this ruling in Oliver v. Natl. Collegiate Athletic Assn., 920 N.E.2d 203
(2009).
104
DI Manual, supra note 86 at 12.3.2.1 (Presence of a Lawyer at Negotiations).
105
Newman-Baker, supra note 102 at 5.
106
DI Manual, supra note 86 at 12.2.4.2 (Draft List).
178
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IV. THE NCAA & NBA EVALUATION PERIOD
This Article has discussed why the changes in the NBA draft eligibility rules have forced individuals to attend college in greater numbers since
2006, resulting in large numbers of student-athletes on college campuses
who want to leave early. These student-athletes face the unenviable predicament of being squeezed between the rules and regulations of both the NBA
and NCAA. It is during this time, referred to as the “evaluation period,”
that a student-athlete may assess his true potential in the NBA.
The combination of money and the change in the way that NBA teams
evaluate talent virtually dictates that players turn professional as early as
possible, greatly affecting the landscape of college basketball as a result.
The elite NBA players who have completed four years of college have all but
disappeared.
Looking at the players who have played in the NBA All-Star game
shows how the League has evolved over the past two decades. Every player
in the 1991 NBA All-Star game spent at least two years in college.107 Ten
years later, in the 2001 NBA All-Star game, four of the twenty-four participants had skipped college altogether – Tracy McGrady, Kobe Bryant, Kevin
Garnett and European star Vlade Divac.108
By 2011 NBA All-Star Game, fourteen of the twenty-four players
came into the league from high school, from overseas, or with only one year
of college on his resume.109 In fact, only one player, Tim Duncan, had spent
four years in college.110 These data show that while four-year college players
certainly can make it into the NBA, their numbers are meager and, by and
large, they are not perceived to be at the pinnacle of their profession.
This “one and done” reality is a common complaint amongst college
basketball fans. The premature departure of an underclassman from school
is viewed with disdain by the institution’s alma mater, academia, and even
their own coaches. These players are criticized for either a lack of allegiance
or chasing an early payday. But the system forcing them to make this decision was devised by the NBA and NCAA membership; the players are simply acting accordingly.
107
1991 NBA All-Star Game Box Score, BasketballReference.com, http://
www.basketball-reference.com/allstar/NBA_1991.html (last visited Oct. 25, 2011).
108
109
110
Id.
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179
The NCAA attempted to address this “one and done” situation by
developing an “evaluation period” whereby student-athletes could declare
for the NBA draft, evaluate their prospects, and return to college with their
eligibility intact, so long as they followed certain rules. The creation of this
evaluation period began in 1994, when the NCAA carved out an exception
for men’s basketball players under rule 12.2.4.2.1, which states that:
“[A]n enrolled student-athlete (as opposed to a prospective student-athlete) in the sport of basketball may enter a professional league’s draft one
time during his or her collegiate career without jeopardizing eligibility in
that sport, provided the student-athlete is not drafted by any team in that
league and the student-athlete declares his or her intention to resume intercollegiate participation within 30 days after the draft.”111
The intent behind this rule was to benefit the student-athlete by giving him
the ability to return to college (and hopefully pursue his degree) should he
make the mistake of declaring early when the NBA did not perceive him as
ready for professional basketball. During the time in which a student-athlete is allowed to consider this transition, both the NCAA and NBA lose a
modicum of control.
The negative response to this rule’s adoption in 1994 was immediate
and harsh. In an article published by The Los Angeles Times, many basketball
experts weighed in on this controversy.112 Rick Majerus, then head coach at
the University of Utah, declared, “You can tell [the rule] was done by the
NCAA and not the NBA . . . [b]ecause the NCAA doesn’t know what the
hell it’s doing. The ramifications of this rule are mind-boggling.”113 Then
Commissioner of the Big East Conference Mike Tranghese agreed when he
stated this rule is “absolutely, in my view, one of the worst rules ever
adopted.”114 The response from the NBA towards this rule was also negative. Jerry Reynolds, director of player personnel of the Sacramento Kings,
and Pat Williams, general manager of the Orlando Magic, spoke out against
this rule.115
111
DI Manual, supra note 86, at 12.2.4.2.1 (Exception—Professional Basketball
Draft). Note that this rule was adopted in 1994 and was revised in 1995, 1997, and
2003.
112
Gene Wojciechowski, NCAA Change Dumb to Some: Basketball: New rule that
allows undergraduates to return to school after testing NBA draft stirs controversy, L.A.
Times, June 28, 1994, http://articles.latimes.com/1994-06-28/sports/sp-9497_1_
nba-draft.
113
Id.
114
Id.
115
Id.
180
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Despite its criticism, however, the rule did have an impact on studentathletes choosing the early entry process. A total of 674 individuals have
declared themselves for the NBA draft as “early entrants” since 2005, 476
of those being college freshman, sophomores, and juniors (the balance are
international players).116 The yearly breakdown of college players declaring
early is as follows:
2005
61
2006
63
2007
59
2008
70
2009
74
2010
80
2011
69
Over the past seven years, an average of 68 NCAA underclassmen with
eligibility remaining have indicated that they would like to be considered
for the NBA draft. But a full 42% (198 out of 476) of those who declare
early later remove their names from that year’s NBA draft.117 Thus, over the
past seven years, although an average of sixty-eight players enter their names
early for the NBA draft, only an average of forty choose to remain in the
draft.
The following chart provides the specific number of early entry submissions who stayed in the draft for the last seven years:
Year
Underclassmen
staying in the draft
2005
2006
2007
2008
2009
2010
2011
39
37
32
39
38
51
42
Between 2005 and 2010, 174 individuals returned to college after initially declaring their intention to enter the NBA draft. It should be noted
that over 20% of those returning players (36 out of 174, or 20.7%) were
drafted in subsequent years.118 This Article will return to these data to
discuss when entering the draft is considered a “good decision.”
Randolph Morris highlighted the ramifications of these rules in 2005.
Morris was a high school All-American after his senior year, and he gave
serious thought to skipping college entirely and entering the NBA draft.119
Instead he joined future NBA players Joe Crawford and Rajon Rondo, becoming part of the top rated recruiting class in the country when the three
116
See Historical Drafts, THEDRAFTREVIEW.COM, supra note 15.
Id.
118
Id.
119
Adrian Wojnarowski, The Problematic Prospect, YAHOO!SPORTS.COM (Dec.
11, 2006, 2:25 PM), http://sports.yahoo.com/nba/news?slug=aw-morris121106.
117
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181
enrolled at Kentucky.120 After a successful freshman season, Morris chose to
leave school, hired an agent, and entered the NBA Draft, only to go
undrafted.121
After the draft, Morris decided to return to Kentucky rather than try
out for the NBA as an undrafted free agent. To do so, Morris petitioned the
NCAA to restore his college eligibility. Because Morris had signed with an
agent prior to the draft, the NCAA initially served him with a one-year
suspension.122 However, after the NCAA found that Morris had a “clear
intent to retain his college eligibility while declaring for the NBA draft,” it
reduced his full season suspension to just the first fourteen games of the
2005-06 basketball season.123 Morris thus found himself in a unique situation, floating between NCAA and NBA rules.
Under the rules of the NBA’s CBA, Morris was ineligible to re-enter a
future NBA draft and was therefore immediately declared a free agent.124
As a free agent, he could be signed at any time.125 However, Morris also had
college eligibility granted by the NCAA to play for Kentucky. As a result,
Morris could leave Kentucky at any time he wished. Not surprisingly, once
Kentucky was eliminated from the NCAA Tournament in 2006, Morris
chose to leave college mid-semester, signing a two-year, $1.6 million contract with the New York Knicks.126
Neither the NCAA nor the NBA was happy with this outcome. The
NCAA determined in 2009 that it would change its rules relative to declar120
Rivals.com Top 25 for 2004, Rivals.com, http://rivalshoops.rivals.com/content.asp?SID=910&CID=297763 (last visited Oct. 17, 2011). Note that this class
also included Ramel Bradley and transfer Patrick Starks.
121
Howard Beck, Knicks Sign Center Who Was Undrafted but Not Unnoticed, N.Y.
Times, Mar. 24, 2007, http://www.nytimes.com/2007/03/24/sports/basketball/24
garden.html?fta=y.
122
NCAA Reduces Morris Suspension, Espn.com (Dec. 15, 2005, 7:36 PM), http://
sports.espn.go.com/espn/wire?section=ncb&id=2260093. Publicly, Morris stated
“in exploring my NBA options I made poor choices . . . [t]hose choices included
accepting bad advice while putting distance between me and my coaches and
teammates.”
123
See John Clay, Getting Legal Help Not a Good Thing for UK, Morris Case Dragging out, Lexington Herald Leader, Nov. 16, 2005, at C1; Wildcats’ Morris Has
Penalty Reduced, Orlando Sentinel, Dec. 16, 2005, at D5; See Jerry Tipton, Morris
Will Be Back on Jan. 10: Confidential Evidence and Fax Change season, Lexington
Herald-Leader, Dec. 16, 200, at A1.
124
Beck, supra note 121.
125
Wojnarowski, supra note 119.
126
Knicks Sign Kentucky Center Morris to 2-year Deal, Espn.com, http://sports.
espn.go.com/nba/news/story?id=2809958 (last visited Nov. 11, 2011).
182
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ing for the NBA draft while retaining amateur status.127 This rule change
meant that college players needed to decide whether or not they would remain in the draft before the draft was held—thus forcing them to guess
their draft status rather than waiting for the results and then deciding. The
rule is intended to benefit college basketball coaches who want to know
what their rosters will look like for the upcoming year, which helps them on
the recruiting trail.
The language of this rule is as follows:
“In men’s basketball, an enrolled student-athlete may enter a professional
league’s draft one time during his collegiate career without jeopardizing
eligibility in that sport, provided:
1. The student-athlete requests that his name be removed from the
draft list and declares his intent to resume intercollegiate participation not later than the end of May 8th of the year in which the
draft will occur;
2. The student-athlete’s declaration of intent is submitted in writing
to the institution’s director of athletics; and
3. The student-athlete is not drafted.”128
This rule results in the following timeline: a student-athlete plays their college basketball season, which hopefully includes a deep run into the
NCAA’s “March Madness” Tournament, traditionally ending the first Monday in April. Those who have exhausted their four years of college eligibility (i.e. seniors) are automatically eligible for the NBA draft.
Underclassmen typically declare their intention to enter the upcoming draft
by formally submitting their name to the NBA’s league office.
Under NBA rules, teams are prohibited from having any direct contact
with draft ineligible players.129 This restriction makes sense, as allowing
teams to contact high school or college players would be a nightmare. As a
result of this restriction, the underclassmen who submit their names for the
127
Andy Katz, Rule Change Would Alter Draft Process, Espn.com, http://espn.go.
com/mens-college-basketball/blog/_/name/katz_andy/id/4086305 (last visited Nov.
11, 2011).
128
DI Manual, supra note 86, at 12.2.4.2.1.1 (Exception—Basketball—FourYear College Student-Athlete, Men’s Basketball).
129
Ken Berger, Knicks-Thomas Reunion Against NBA Rules. . .and a Horrible Idea,
CBSSports.com, http://www.cbssports.com/nba/story/13731440/knicksthomas-reunion-against-nba-rules-and-a-horrible-idea (last visited Nov. 11, 2011); see also
Adrian Wojnarowski, Sources: N.Y. Scout Led Improper Workouts, Yahoo! Sports,
http://sports.yahoo.com/nba/news?slug=aw-knicksdraft102610 (last visited Nov.
11, 2011).
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183
upcoming draft cannot be contacted by any NBA team until the NBA officially publishes its “final” list.
Many student-athletes spend the better part of March traveling for
high profile conference tournament games, and then to NCAA sites around
the country for March Madness. These tournaments generate tremendous
amounts of money for the NCAA and its member institutions.130 (One need
not point out the money and attention these tournaments bring to the
NCAA and its member institutions.) The student-athletes then return to
campus as their academic year is winding down and final examinations are
beginning. It is during this time that players have approximately a threeweek window in which to decide whether to submit their name for the NBA
draft.131 Not surprisingly, many opt to submit and make their true decision
later.
Once a player decides to declare, he must navigate the legal regulations
established between the NBA and NCAA. It takes some level of expertise
to properly advise student-athletes as to what they are allowed to do during
this time period if they wish to obtain an evaluation of their prospects, yet
retain their college eligibility. Unfortunately, the availability of unbiased
guidance is rare on college campuses. Far too few schools take advantage of
the Professional Sports Counseling Panel legislation aimed at assisting student-athletes in entering professional athletics with real assistance.132
The NCAA has rules specifically targeted towards men’s basketball
players “testing the waters” while pursuing a career in professional basketball. First, as already noted, college basketball players may enter their
names into the NBA draft one time during their college career without
jeopardizing their eligibility. However, under NCAA amateurism rules,
these students may not sign with an agent at any point and retain their
130
Brad Wolverton, NCAA Agrees to $10.8-Billion Deal to Broadcast Its Men’s
Basketball Tournament, The Chronicle, http://chronicle.com/article/NCAA-Signs108-Billion-De/65219/ (last visited Nov. 11, 2011).
131
In 2011, the date by which to declare for the draft was April 24, 2011. 2011
NBA Draft Early Entry Analysis, CBSSports.com, http://www.cbssports.com/collegebasketball/story/14878964/nba-draft-early-entry-commitments (last visited
Nov. 11, 2011).
132
DI Manual, supra note 86, at 12.3.4 (Professional Sports Counseling Panel).
For greater analysis of the benefits and uses of these panels, see Wong et al., supra
note 14.
184
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college eligibility.133 Additionally, these players must withdraw their name
from the draft by a certain date should they want to return to college.134
During this evaluation period NBA teams may meet with potential
draftees. In fact, players may tryout with NBA teams, at the NBA team’s
expense, so long as the student-athletes are enrolled full-time and do not
miss any classes.135 Prospects may also submit their names to the NBA’s
“Undergraduate Advisory Committee,” which is composed of NBA team
executives, and receive a confidential projection of their likely draft
position.136
The challenge is that the evaluation received from this Committee is
neither an exact science nor particularly helpful because of the variance in
the feedback of NBA scouts and executives. An assessment indicating that a
player may be taken “between the middle of the first round and the middle
of the second round,” while an honest appraisal, provides no true insight as
to whether an individual should make this jump. The difference between a
first round selection and a second round selection is enormous. The first
round pick is provided, under the recently expired CBA, a guaranteed three
year contract, while the second round pick is guaranteed nothing.137 Consequently, without considering a player’s individual circumstances, the standard interpretation is that a player who leaves early and is selected in the
first round made a “good” choice, while one who is either drafted in the
second round or undrafted made a “mistake.”
To help ease the concerns that student-athletes might have with returning to college when a professional career in the NBA is available to
them, the NCAA created the Exceptional Student-Athlete Disability Insur-
133
DI Manual, supra note 86, at 12.3.1 (Use of Agents).
NCAA Makes Rule Changes, ESPN.com (May 1, 2011, 12:53 PM), http://
sports.espn.go.com/ncaa/news/story?id=6444510.
135
DI Manual, supra note 86 at 12.2.1.3.1 (Exception for Predraft Basketball
Camp).
136
Dana O’Neil, Coaches, Fans Hold Their Breath as More Players Flirt with NBA,
ESPN.com (Apr. 30, 2008), http://sports.espn.go.com/ncb/columns/story?columnist
=oneil_dana&id=3373696.
137
2005 Collective Bargaining Agreement, supra note 72, at art. VIII § 1. The CBA
discusses the minimum contract requirements that must be offered a first round
selection. There is no restriction, either as a minimum or maximum offer, that an
NBA team must offer a second round selection. They may be treated as any other
free agent with the exception that they are only able to negotiate with the team that
drafts them.
134
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185
ance (ESDI) program.138 This program allows student-athletes with a future
in professional athletics the ability to insure against debilitating injury during their college careers.139 The program, offered for the first time by the
NCAA in 1990 for football and men’s basketball, now includes men’s ice
hockey, baseball, and women’s basketball.140
Student-athletes who have demonstrated that they have the potential
to be selected in the first round of the NBA draft are eligible for the program. If the athlete suffers a permanent total disability, the policy provides
the student-athlete with a lump sum payment.141 It is important to note
that permanent total disability typically requires that the athlete be completely unable to perform his or her profession or sport for an entire twelvemonth period after the initial injury.142
In theory, the evaluation process seems to make sense. An undergraduate student-athlete can seek to evaluate his NBA potential in a variety of
ways. He can submit his name to the NBA draft indicating his intention to
join that year’s class. He can interview agents, so long as he doesn’t agree to
sign with one. He can get a confidential assessment of his draft status from
the NBA. He can try out with teams. In all of these areas, the NCAA has
shown some leniency and common sense in understanding the magnitude of
the decision a student-athlete faces at this critical time in his life. The intent behind these rules seems admirable under a cursory examination, but
one must look deeper.
Unfortunately, the “evaluation period” that the NCAA affords its student-athletes to determine what is in their best interests – an immediate
career in the NBA or a return to college – has been severely hampered by
the dates and restrictions that the NCAA, not the NBA, has imposed. In
138
See Exceptional Student-Athlete Disability Insurance Program, National Collegiate Athletic Association, http://www.ncaa.org/wps/portal/ncaahome?WCM
_GLOBAL_CONTEXT=/ncaa/NCAA/About+The+NCAA/Budget+and+Finances/Insurance/exceptional.html (last visited Nov. 11, 2011).
139
Jerome Solomon, NCAA to OK Financial Allowances for Athletes, Hous.
Chron., Apr. 26, 2001, http://www.chron.com/sports/college/article/NCAA-toOK-financial-allowances-for-athletes-2053063.php.
140
See Exceptional Student-Athlete Disability Insurance Program, supra note 138.
141
Id.
142
For more information on a related argument, that the NCAA should seek to
revise its current exceptional student disability insurance policy program whereby
elite student-athletes should have the ability to obtain insurance for partial, not
merely permanent disability coverage, see Glenn M. Wong & Chris Deubert, The
Legal and Business Aspects of Disability Insurance Policies in Professional and College
Sports, 17 Vill. Sports & Ent. L.J. 473 (Spring 2010).
186
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2011 the deadline to apply for early-entry for the NBA draft was April 24,
2011. On that day, the NBA released its official list of “draft eligible”
prospects, and NBA team officials were allowed to have contact with potential draftees, including scheduling tryouts. Under NBA rules, the first date
that NBA teams could hold workouts for early-entry players was April 28,
2011. The date by which these potential draftees must withdraw their
names from the draft in order to maintain their NCAA eligibility was May
8, 2011.
These deadlines resulted in only eleven days during which time a student-athlete was permitted to receive an appraisal from the NBA, from
which he must make a career defining decision. Add to that timeframe the
fact that NCAA regulations prohibit a student-athlete from missing any
classes in order to travel or tryout with NBA teams.143 This regulation is
strictly enforced, despite the fact that the NCAA appears unconcerned by
the number of classes these individuals miss in the month of March while
promoting their school at various conference and NCAA tournaments. Furthermore, the NCAA permits a student-athlete to miss class time to interview for any job outside of professional athletics.
Additionally, while the NBA draft is an important talent-recruitment
mechanism for the league, sixteen NBA teams are beginning the playoffs
during this period, making it virtually impossible for these teams to concentrate on providing accurate player evaluations. The front offices of NBA
teams have limited personnel, and staff are preoccupied by the team’s playoff
run. The result is that NBA teams truly do not have a sense of where potential players may be selected two months before the draft. It is not until they
have had adequate time to concentrate on and evaluate these college players
– something that realistically happens much closer to the day of the draft –
that NBA teams have any sense of a player’s likely draft prospects.
Why are there are so few days during which a real assessment of an
individual’s potential is allowed? Blame must be placed on the most powerful cohort within the NCAA—the college coaches. While many NCAA
rules take into account the well-being of the student-athlete, the coaches
ultimately carry more weight.
Between 2009 and 2011, the NBA tryout period was reduced from
fifty days to just eleven days. The reason behind this change is that coaches
want to know which of their players are returning. College coaches, particularly those at the traditional basketball power schools, felt they were being
143
One interesting note is that few in academia would think twice about an
outstanding student in the field of accounting or finance leaving campus – and
missing classes – to interview in Boston or New York.
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187
held hostage as their players waited to decide whether to return to their
institution.144 The perception was that this uncertainty left roster spots and
scholarships unused for an upcoming season, potentially preventing a team
from maximizing its pool of talent.145
In 2010 and 2011, 149 NCAA student-athletes declared for the NBA
draft as early-entry participants. A total of fifty-seven of them (or 38%)
decided to return to college—either because of a poor reception from the
NBA or not having enough time to properly evaluate this decision. However, only 42% of the original 149 student-athletes were drafted so, in retrospect, another thirty players should have pulled their names from the NBA
draft. Furthermore, if you add the twenty underclassmen drafted in the
second round, a total of fifty of the 149, or 34%, probably would have been
better served by returning to school.146
Given the high numbers of individuals improperly evaluating their
NBA prospects, it seems right for the NCAA to consider a better process
with more time for students to make this decision. But for 2012 and beyond, according to the NCAA – or at least high profile college coaches – the
NCAA will not consider such a change. In fact, in 2011 a new proposal was
submitted to the NCAA which would make the time frame for a studentathlete to “request that his name be removed from the draft list and declares
his intent to resume intercollegiate participation no later than the end of the
day before the first day of the spring National Letter of Intent signing period for the applicable year.”147
The legislation itself, put forth by the men’s basketball coaches of the
ACC – most ardently by UNC’s Roy Williams, according to many148 –
provides some background into their thinking when it states:
144
Andy Katz, Time For the Annual Draft Deadline Changes, ESPN.com (Apr. 14,
2011, 1:50 PM), http://espn.go.com/mens-college-basketball/blog/_/name/katz_
andy/id/6354169 [hereinafter Katz, Annual Draft]; see also Andy Katz, Should EarlyEntry Withdrawal Date Move?, ESPN.com (Jan. 21, 2011, 1:11 PM), http://espn.go.
com/mens-college-basketball/blog/_/name/katz_andy/id/6045445 [hereinafter Katz,
Should Early-Entry].
145
Id.
146
Note: these numbers does not take into account those who for academic reasons could not return to school.
147
2011 Division I Official Notice: Legislation for Consideration at the January and
April 2011 NCAA Division I Legislative Council and NCAA Division I Board of Directors Meetings, 46, http://fs.ncaa.org/Docs/AMA/legislative_actions_issues/Division%
20I/2011%20Official%20Notice/2011%20DION.pdf (last visited Nov. 4, 2011).
148
Bob Geary, NBA Lockout? We’ve Got Your Pro Basketball Right Here. INDYWEEK.COM (Nov. 23, 2011, 2:35 PM), http://www.indyweek.com/indyweek/
nba-lockout-weve-got-your-pro-basketball-right-here/Content?oid=2712306.
188
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“Before the adoption of the current rule, student-athletes had approximately 50 days to decide whether to remain in the draft and tryouts with
NBA teams could occur only in the last 20 days. During that period,
collegiate head coaches were often in limbo regarding the status of their
rosters for the upcoming season. Further, student-athletes typically spent a
large part of that time away from campus training for pre-draft workouts,
which resulted in academic concerns. The current legislation reduced the
problem by setting the withdrawal deadline May 8, which is 40 days earlier than the previous withdrawal deadline but still 22 days after the first
day of the National Letter of Intent late signing period for men’s basketball in April. This year, NBA teams did not spend money to have workouts with student-athletes until the withdrawal deadline passed. By
moving the withdrawal deadline, coaches will have flexibility to address roster
issues at the beginning of the spring signing period while viable prospects are still
available. Evaluations by professional scouts and others during preseason
practices, regular season games and postseason games should provide student-athletes with adequate information to credibly determine NBA draft
status.”149
Two high profile coaches, Kentucky’s John Calipari and Syracuse’s Jim
Boeheim, argued against the implementation of this rule. With 34 years of
coaching experience at his alma mater, Boeheim declared “I don’t think it’s
a good thing. I’m not sure who actually was in favor of that or why it got
in.”150 Calipari further argued on behalf of the student-athletes when he
said, “All this stuff: For the good of college basketball? This should be
about these kids. . . . They’ve done their good for college basketball. This
should be about, ‘How can we help these kids make a good decision?’” 151
Even Gary Williams, the coach at ACC member school, the University of
Maryland, opposed this rule change. He declared: “[f]or the basketball
players, it’s a little quick to make that decision, especially after the NCAA
tournament. If you have a tough loss, it’s not enough time to calm down
and make a good decision.’’152 As Mike DeCourcy wrote in The Sporting
News on February 14, 2011, “[t]he ACC coaches who allowed this proposal
to escape with their names attached should be, each and every one of them,
ashamed. Not all supported it as ardently as North Carolina’s Roy Williams
149
2011 Division I Official Notice, supra note 147.
Todd Dybas, Dybas: Early Withdrawal Rule Penalizes College Basketball,
Sportspress N.W. (June 30, 2011, 7:00 AM), http://uwhoops.sportspressnw.com/
2011/06/30/dybas-early-withdrawal-rule-penalizes-college-basketball/.
151
Mike DeCourcy, NCAA Would Be Wrong to Move up Early Entry Date, Sporting News (Apr. 13, 2011), http://aol.sportingnews.com/ncaa-basketball/story/201104-13/ncaa-would-be-wrong-to-move-up-early-entry-date.
152
See Katz, Annual Draft, supra note 144.
150
R
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189
and Florida State’s Leonard Hamilton, but neither did they successfully intervene to stop it.”153
After careful evaluation, as is part of the NCAA’s legislative process,
the Amateurism Cabinet reviewed the proposal. Its response, also found in
the legislation as a position statement, was as follows:
“The cabinet opposes the proposal. The cabinet notes that the current rule
requiring a student-athlete to withdraw his name by May 8 has only been
in effect for one year and that the current rule needs further evaluation.
Reducing the current time period might put student-athletes at a disadvantage by not allowing them sufficient time to gather adequate information, as well as taking away opportunities for student-athletes to
participate in pre-draft workouts. Finally, there is no evidence of an academic impact on student-athletes under the current timeline.”154
This statement shows the NCAA Amateurism Cabinet is arguing on behalf
of the welfare of student-athletes, and opposing the wishes of the ACC
men’s basketball coaches. However, the NCAA’s “Men’s Basketball Issues
Committee” responded to this proposal by simply declaring “the committee
supports the proposal.”155 Nevertheless, the Committee did express some
concern as to whether an earlier date would create distractions for studentathletes at the conclusion of the regular season. Despite these concerns from
groups within the NCAA, this rule passed and took effect on August 1,
2011.156
What this new rule means for the 2012 draft class is unclear. What is
clear is that a player needs to remove his name from the NBA draft list “no
later than the end of the day before the first day of the spring National
Letter of Intent signing period.”157 That date in 2012 is April 11.158 The
National Championship game in men’s basketball will be played on April 2,
2012.159 Thus, players either have one week to make this decision, or they
must be thinking about the decision long before the end of their season in
153
Mike Decourcy, Making a Bad Early Decision Worse, Sporting News (Feb.
14, 2011), http://periodicals.faqs.org/201102/2280688401.html.
154
2011 Division I Official Notice, supra note 147.
155
Katz, Annual Draft, supra note 144 (quoting NCAA proposed legislation).
156
2010-2011 NCAA Legislation (as of August 26, 2010) available at http://
www.mvc-sports.com/media/pdf/Compliance/2010-11_NCAA%20Legislation.pdf.
157
Id.
158
National Letter of Intent, National Collegiate Athletic Association, http://
www.ncaa.org/wps/wcm/connect/nli/nli (last visited November 3, 2011).
159
March Madness 2012, National Collegiate Athletic Association,
http://www.ncaa.com/march-madness (last visited Nov. 12, 2011).
190
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March. This is certainly not an ideal situation, and it is only exacerbated by
the fact that the NBA prohibits contact with college players until they have
announced their decision to come out for the draft.
Another problem with a short decision-making window is determining
who can provide guidance to student-athletes during this critical period. As
mentioned, under current NCAA rules, men’s basketball players may not
receive guidance from advisors in the way that baseball and hockey players
do.160 Additionally, there is a true dearth of Professional Sports Counseling
Panels on college campuses around the country. These panels are allowed
under NCAA rules but, by and large, are not adopted by schools. As a
result of this lack of trustworthy guidance, many men’s basketball players
turn to their AAU coaches for advice – a scary proposition.
Since no one seems to be speaking out on behalf of these student-athletes while they are in college, their professional representatives are now
doing so publicly. As Andy Katz states in his blog:
“It is a further impediment to the athlete and his ability to analyze his
options, said agent Bill Duffy, whose firm, BDA Sports Management, represents NBA players such as Steve Nash, Yao Ming and Rajon Rondo. ‘It
is definitely self-serving for the institutions. I don’t think it impacts prospects in the top 10 but mid-to-late first-rounders looking to position
themselves higher in the draft are harmed significantly.’” 161
Mark Bartelstein, CEO of Priority Sports & Entertainment, and agent to
over thirty NBA players,162 said he “regularly fields calls from players’ families seeking information on a player’s draft status.”163 “He also said “in his
daily talks with NBA general managers he’s been told [that NBA teams] are
in no position to [give] draft advice in January or February since the draft is
too far away.”164 “It will be a disaster because college coaches will be wondering why players are distracted,” Bartelstein said.165 He went on to say:
160
Example Letter Sent to Basketball Student-Athletes, National Collegiate
Athletic Association, (Jul. 20, 2010), http://www.ncaa.org/wps/wcm/connect/
public/NCAA/Resources/Latest+News/2010+news+stories/July+latest+news/
Example+letter+sent+to+basketball+student-athletes. Note: similar letter was
sent to men’s ice hockey players as well.’’
161
See Katz, Should Early-Entry, supra note 144.
162
Mark Bartelstein, Priority Sports & Entertainment, http://www.priority
basketball.biz/basketball/MarkBartelsteinBB.html (last visited Nov. 16, 2011).
163
Id.
164
Id.
165
See Katz, Should Early-Entry, supra note 144.
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191
“I’ve been a huge proponent for years to let the players focus on the season.
I’ve told them they’ll have plenty of time to figure out what the right
thing to do is because there are no sure answers in January, February or
March. No one knows in even late April what’s happening [with the
draft]. You’re asking kids to make decisions without accurate information.
Teams don’t know what they’re doing. It’s going to be a nightmare for
college coaches. . . . [Moving the date to early April will bring] all kinds
of people telling [players] what they want to hear and don’t have the real
answer.”166
Many players are opposed to this legislation as well. Butler University star
Matt Howard commented on moving up the date to withdraw from the
NBA draft this past spring, “For players, I just don’t see how that helps
them a whole lot. . . . It almost makes it pointless to put your name out and
not sign with an agent.”167
V. PROPOSALS
What is clear is that student-athletes in the sport of basketball are
caught in a quagmire of rules and regulations that significantly impede their
ability to properly evaluate their NBA prospects. The restraints on the
manner and timing of entry into the NBA have evolved over the past several
decades, as both the NBA and NCAA have developed rules that reflect their
own economic self-interests. The byproduct of these rules is an inefficient
marketplace for players entering the NBA from college, as demonstrated by
the significant number of players that leave early yet remain undrafted.
As this Article has highlighted, many seemingly insignificant rule
changes by both the NBA and NCAA have impacted student’s’ entry into
professional basketball. While each specific rule may have addressed a single issue that needed clarity at the time of creation, the result is a mess of
obstacles throughout the transition period. The inefficiencies are compounded by the fact that the NBA and NCAA each react to the other’s
policies rather than developing better practices in tandem.
Because self-interest directs the actions of the sport’s governing bodies
the resulting outcome is that, in reality, there is no true advocacy group for
the welfare of student-athletes in assisting their transition into the professional environment. This is not to argue that the NCAA and its members
are not concerned about the general welfare of student-athletes. The NCAA
is quick to point out that it has over 380,000 student-athletes and just
166
Id.
NCAA Makes Rule Changes, Espn.com (May 1, 2011, 12:53 PM), http://
sports.espn.go.com/ncaa/news/story?id=6444510.
167
192
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about every one of them will turn professional in something other than
sports.168 While this declaration is true, it ignores the small minority of
student-athletes who do have the opportunity to make this transition, yet
have no unbiased support at the institutional level and no advocacy group
within the professional industry they hope to enter.
Unequivocally, both the NBA and NCAA have every right, and in fact
a duty, to develop rules that govern their organizations and seek to further
their purpose and goals. However, in so doing, a true voice for the participating individuals (i.e. student-athletes) is muted or ignored in the process.
In theory, member institutions are tasked with the responsibility of advocating on behalf of the student-athlete. Yet, when student-athletes have limited legal standing to challenge inequities,169 schools (or more likely high
profile coaches) are free to trade the students’ best interests in for financial
gain for their institution or conference.170
In challenging economic times one cannot disagree with the decision
that when balancing the rights of a few high profile athletes against the
potential revenue stream for an entire institution, schools are quick to
choose revenue. Nevertheless, the end result is that we are left with an
environment of rules171 that generate billions in revenues from amateur athletics without truly compensating the participants.172 One result of this
168
NCAA Public Service Announcement: Basketball, YouTube (Apr. 24, 2008),
http://www.youtube.com/watch?v=G40g9RTxurw. NCAA Public Service Announcement developed by Young & Rubicam for JoJo Rinebold, the NCAA’s managing director of brand strategies and events.
169
Waldrep v. Tex. Emp’rs. Ins. Assoc., 21 S.W.3d 692 (Tex. App. 2000).
170
Michelle Kaufman, College Conference Realignment All About the Money, Indianapolis Star, Oct. 4, 2011, http://www.indystar.com/article/20111004/SPORTS/
110040362/College-conference-realignment-all-about-money.
171
See generally DI Manual, supra note 86, at 16.1 (Awards). This section of the
NCAA manual discusses the ability and restrictions on providing athletic scholarships to student-athletes. It should be noted that this paper does not support the
argument that we should be “paying” student-athletes other than a revision to the
rules to allow schools to provide the full cost of attendance. See DI Manual, supra
note 86, at 15.02.2 (Cost of Attendance) (inability of schools to provide full cost of
attendance in all circumstances).
172
An example of the revenue available to the NCAA is in their recent television
contract to broadcast their Division I Men’s Basketball Tournament. See Thomas
O’Toole, NCAA Reaches 14-year Deal With CBS/Turner for Men’s Basketball Tournament, Which Expands to 68 Teams for now, USA Today, Apr. 22, 2010, http://content.usatoday.com/communities/campusrivalry/post/2010/04/ncaa-reaches-14-yeardeal-with-cbsturner/1.
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193
perception is the growing support amongst many to refute the NCAA’s concept of amateurism and pay student-athletes.173
Returning to the numbers helps to illustrate the importance of the
evaluation period. Interpreting both NCAA legislation and NBA draft eligibility rules under the recently expired CBA, in 2011 a college athlete
needed to declare for the draft, evaluate his chances, and return to college
within a window of ten days.174 Many critics have debated over the rule that
the NBA passed in 2005 requiring basketball players be nineteen years old
before they are draft eligible, yet so far the rule remains.175 Of additional
note is the reality that both the NBA and NBPA seem to be ignoring this
matter in their current labor negotiations.176
Ignoring the legal opinions, the argument that high school graduates
are unprepared or too immature to compete in the NBA can be refuted with
the success of LeBron James, Kobe Bryant and Kevin Garnett, among
others.177 Most germane to this argument is the fact that the age requirement really only affects a limited number of people. Specifically, during the
decade between 1995 and 2005, only thirty-nine players skipped college to
enter the NBA.178 This does not mean that every one of those thirty-nine
individuals made the right choice, only that it comparatively wasn’t a tremendously large number of people choosing to bypass college.
The number of college students considering a transition, however, is
much larger. During the seven years between 2005 and 2011, a total of 490
college underclassmen participated in this “evaluation period.”179 This
number indicates that greater attention must be paid to the evaluation period of the amateur draft and the interests of student-athletes during this
crucial time. Given the new NCAA legislation that was put through during
the 2011 summer, student-athletes will need to make a decision within a
173
Branch, supra, note 8.
The NCAA Championship game will be played on April 2, 2012, and the
NLI date by which a student-athlete is now required to remove his name from the
upcoming NBA draft is April 11, 2012. March Madness 2012, supra note 159.
175
Scoop Jackson, NBA’s Age Restriction Won’t Change, ESPN.com (Jan. 18,
2010), http://sports.espn.go.com/espn/commentary/news/story?id=4836818.
176
Lowe, supra note 93.
177
For a recent article questioning the perception that high school players do
not succeed in the NBA, see Tom Haberstroh, Impact of the One-and-Done Rule,
ESPN.com (Oct. 28, 2011, 6:27 PM), http://insider.espn.go.com/mens-college-basketball/preview2011/story/_/id/7156333/state-game-impact-one-done-rule-nba-college-basketball.
178
Historical Drafts, supra note 15.
179
Id.
174
194
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week after the NCAA Men’s Basketball Championship game, and before
getting official feedback from the NBA, making this critical time period
more important now than ever before.
It would be negligent to identify problems in this process without proposing some recommendations that would truly benefit the student-athletes.
Accordingly, in order for student-athletes making this transition from college to the NBA to receive an honest appraisal of their potential, it is necessary for both the NBA and NCAA to modify their rules such that studentathletes are able to make an informed decision on whether to enter professional basketball. While direct collaboration between the NBA and NCAA
may well be deemed illegal,180 each organization has the ability to make
some rule changes that benefit the student-athlete without harming its own
mission. As such, the following proposals are offered:
1. The NBA should adopt draft eligibility rules similar to those in MLB.
In baseball, high school graduates are automatically draft eligible and
need not petition or declare their intention for the draft. A drafted high
school player has until August 15 to decide whether he will sign with
the major league team or attend college.181 The player is allowed an
“advisor,” but not an agent, to help him assess both a proposed contract
and the decision to enter professional baseball.182 So long as he has not
accepted money, or broken NCAA rules in another way, the player has
retained his amateur status and has the option of attending college—
either a four-year college or junior college.
Once a player enrolls in school, the team that drafted him immediately loses all right to the player.183 Furthermore, the player is not eligible for the MLB draft again until after his junior year (unless he enrolls
in a junior college), meaning a minimum of three years of college.184
180
15 U.S.C.A. § 1. Unfortunately, the ability of these two organizations to
work together will be restricted by antitrust laws that govern conspiracy. Specifically, §1 of the Sherman Act declares that “Every contract, combination in the form
of trust or otherwise, or conspiracy, in restraint of trade or commerce among the
several States, or with foreign nations, is declared to be illegal.” By agreeing to
restrictions that may limit the market for wages and the ability to earn a living, the
NBA and NCAA are limited in their ability to agree upon rules.
181
First Year Player Draft: Official Rules, MLB.com, http://mlb.mlb.com/mlb/
draftday/rules.jsp (last visited Nov. 7, 2011).
182
DI Manual, supra note 86, at 12.3.2 (Legal Counsel).
183
First Year Player Draft, supra note 181.
184
Id.
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195
While MLB’s structure, specifically its minor league system, is
quite different from the NBA, its draft eligibility rules appear transferable. History has proven that talented high school players can succeed in
the NBA, and NBA teams should be allowed to draft high school seniors. This would also ensure that those players who go to college do so
by choice—not because of regulations established by the NBA or
NCAA.
If a player decides to attend college, NBA rules should require that
the player not be draft eligible for two years—after a player’s sophomore
year of college. This revision would allow players two years of a college
education, and provide some level of stability for the NCAA. These provisions should ideally be part of the ongoing CBA discussions between
the NBA and NBPA.
2. As outlined earlier, just as the NCAA allows in baseball and hockey,185
NBA rules should encourage potential players to hire an “advisor” to
assist during this challenging period. If the NBA draft eligibility rules
do change to permit the drafting of high school players, the rules should
allow advisors to contact teams and assist these individuals in the evaluation of their NBA prospects, and ultimately, with their decision of entering the draft or attending college. The abilities of advisors to properly
counsel their clients shouldn’t be neutered by antiquated NCAA amateurism guidelines. It is important to allow student-athletes to receive
valuable advice during this critical period in their lives.
The relationship can be strictly limited in scope to the procurement
of draft potential information and the negotiation of the tryout calendar
with NBA teams. These services can be billed to the student-athlete,
just as advisors are required to receive compensation in baseball and
hockey, at the going rate.186
3. The NCAA should expand and shift the number of days during which
student-athletes may explore their potential as an NBA player while
maintaining their college eligibility.
The benefits of this proposal are obvious. With a longer time to
engage in this process, student-athletes can continue with their academic
185
DI Manual, supra note 86, at 12.3.2 (Legal Counsel).
Sample letter Sent to Baseball Student-Athletes: Letter from Chris Fitzpatrick to Selected Division I Baseball Sports Information Contacts; and Selected Television and Broadcast
Outlets, May 30, 2011, available at http://www.ncaa.org/wps/wcm/connect/7682fa80
46f91bbb87e5e7ac20c3c72c/DI_BSB_Reg_Broadcast_Rights_Memo.pdf?MOD=
AJPERES&CACHEID=7682fa8046f91bbb87e5e7ac20c3c72c.
186
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responsibilities and ensure compliance and eligibility should they return
to campus in the fall. Additional time seems like a simple and easy
accommodation on behalf of the NCAA.
While time to make a sound decision is necessary, the period of
evaluation often occurs during the end of the spring semester. Thus, the
actual timing of this evaluation period should be shifted as well. Rather
than forcing student-athletes to declare and return in the first week of
April, when many NBA teams are distracted and not fully evaluating
potential talent, this period should be pushed back to the middle of May.
This change would bring with it several important benefits.
First, college student-athletes can finish their academic studies
without additional distraction. The NCAA should seemingly be in favor
of allowing more time for student-athletes pursue their educations. Second, a later time period coincides with a time when the NBA is better
prepared to do a thorough evaluation of potential players.
Certainly conferences, schools and basketball coaches will object because such an extension of time, during which a student-athlete remains
undecided on his future, keeps the fall roster for a particular program up
in the air. It may even impact recruiting. However, there are a limited
number of programs that would disproportionately be affected by this
change. Further, the potential negative impact on these elite programs
could be good for the concept of “competitive balance” in college basketball. Ultimately, the goal should be to allow student-athletes the ability
to get a better sense of their true draft prospects. Thus, any pressure on a
particular college coach or program must be weighed against the ability
of an individual to make an irrevocable decision about his future.
4. Coupled with additional time to evaluate the decision on leaving early,
the student-athletes should have a real opportunity to determine their
draft potential directly from the NBA in a timely fashion. In this regard,
NBA rules could be changed to allow:
a) Allow student-athletes in the sport of basketball have to access to
advisors under NCAA rules as discussed earlier;
b) Permit direct contact between the league and Professional Sports
Counseling Panels during an identified time period far greater than
the current 11 days; and
c) The creation of a true “NBA Combine” – similar to the NFL Combine – within the time frame the NCAA permits tryouts that enable
all underclassmen to compete and perform in front of NBA personnel.
This initiative will reduce travel time for college students and allow
for a greater comparison between individual players.
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197
Presently there is an NBA combine, but it consists only of measurements – height, weight, and a few workouts – no 5 on 5 competition.187 Game competition is something that would be tremendously
valuable for both the NBA and participants in assessing their true
draft prospects. While game participation could be optional, all prospects should be required to attend the combine for physical measurements and interviews.
The NFL holds a combine in February in which the entire league
gets to evaluate potential players two full months before the draft.
The NFL’s combine has turned into a tremendous success.
The selection process for the NFL Scouting Combine is clearly
outlined by the NFL: a “Selection Committee,” which includes the
Directors of both National and BLESTO scouting services, is joined
by members of various NFL player personnel departments.188 All
draft eligible players are evaluated and voted on by the Committee.
The most highly sought after prospects – numbered somewhere in the
neighborhood of 300 – are then invited to the Combine. The NFL’s
intention is to predict those college football players that they anticipate being selected in the upcoming NFL Draft.189 And while it’s
highly likely that the players selected in the first several rounds will
be invited, it is not an exact science. Being invited to the NFL Scouting Combine is by no means a guarantee of hearing your name in the
April draft, just as failing to be invited is not a determinative sign
that you will not be drafted or make it to the NFL.
The NFL Scouting Combine has grown in hype each year, and
now is fully televised by the NFL Network.190 What used to be a
reasonably quiet tryout for a select number of college players now gets
hundreds of media members in attendance and millions more watch-
187
Bjorn Zetterberg, 2011 NBA Draft Combine: Day 1 Workout Notes and Analysis, bleacherreport.com, http://bleacherreport.com/articles/704727-2011-nbadraft-combine-day-1-workout-notes-and-analysis (last visited Nov. 7, 2011).
188
How are players selected for the NFL Combine?, NFL.com, http://www.nflcombine.net/faq/how-are-players-selected-for-the-nfl-combine (last visited Nov. 7,
2011).
189
Id.
190
NFL Network & NFL.com Programming Notes (2/23-3/1), NFL.com, http://
www.nfl.com/news/story/09000d5d81e7561f/article/nfl-network-and-nflcom-combine-coverage (last visited Nov. 7, 2011).
198
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ing at home.191 At the Combine, representatives from every team are
in attendance, from owners to general managers, head coaches, position coaches and area scouts. Probably the most important part of this
intense, four-day job interview is the medical evaluations, as team
doctors determine the physical and mental capabilities of these young
men.
This additional information can only help student-athletes in
men’s basketball make a more educated choice.
5. Colleges and universities should invest in Professional Sports Counseling
Panels (“PSCPs”) so that student-athletes can get unbiased guidance
during this critical period of their lives.192 Schools have the ability under
NCAA rules to provide support to student-athletes when making the
transition from college to professional leagues but, for the most part, this
ability has been ignored.193 If schools do not have the ability – either in
financial resources or intellectual talent – on campus to provide this level
of guidance, it should be done at the conference level.
Just as funding for PSCPs needs to be increased by member institutions, the NCAA needs to increase funding to combat these problems. A
clear source of this funding could be the television deals the NCAA and
the conferences have negotiated.194 As pointed out in the Wong article,
funding at the NCAA level could be used in a variety of ways, including:
grants to support PSCPs at individual schools, a repository of best practices in the industry, education on a conference or national level to student-athletes, and proper disability insurance protection.
191
Frank Tadych, Strength in Numbers? Media Crush at Combine, NFL.com http://
blogs.nfl.com/2011/02/24/strength-in-numbers-media-crush-at-combine/ (last visited Nov. 7, 2011).
192
Wong et al., supra note 14, at 575-76.
193
At Some Schools, Advisers Help Navigate Going Pro, ESPN.com (Oct. 14, 2011,
4:17 PM), http://sports.espn.go.com/espn/wire?section=ncf&id=7101951.
194
In April of 2010, CBS and the NCAA reached a new 14-year, $10.8 billion
deal. See John Ourand and Michael Smith, NCAA’s Money-making Matchup, SportsBusinessDaily.com (Apr. 26, 2010), http://www.sportsbusinessjournal.com/article/65533. In July 2010, ESPN and the Atlantic Coast Conference (ACC) reached a
12-year, $1.86 billion deal. Just two years earlier, CBS and ESPN agreed to television deals with the SEC for a total of 15-years and $3.075 billion. See Zach Berman,
Under New TV Deal with ESPN, ACC Schools to See Increased Payout, Wash. Post,
July 9, 2010, http://www.washingtonpost.com/wp-dyn/content/article/2010/07/08/
AR2010070803383.html.
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199
6. The NBA and the NCAA should jointly revise the rules relative to the
NBA draft, whereby any student-athlete who declares himself eligible
has the ability, if not selected in the first round of the NBA draft and
thus guaranteeing himself a contract under the latest CBA, to return to
college. Teams should have little vested in someone they don’t value as a
first round pick. These student-athletes, so long as they haven’t committed other NCAA infractions, would then have the opportunity to continue on towards a college degree while honing their craft and promoting
their schools with another year of college basketball.
7. Student-athletes should be encouraged to graduate with financial incentives from the NBA for those who have spent additional years in college.
It would be possible to grant free agency earlier if a player has completed
his college degree or offer a slightly higher NBA minimum salary for
those with college degrees. Either financial incentive could be enough to
help a marginal prospect decide to invest in another year of college education. However, it is also feasible that the additional financial burden
would be enough to impact the value of a particular player to an individual team.
One potential solution to this conflict is the creation of a separate
league-wide pool that doles out “graduation bonuses.”A set amount
could be provided to anyone on an NBA roster who earns – or subsequently obtains – his college degree. This “bonus” could be reserved for
those with a completed season of service.
The purpose of this enticement is to encourage student-athletes to
further their education. However, a side benefit would be enjoyed by
college athletics, as star players remain eligible for NCAA competition
longer. There is no reason why the NCAA couldn’t contribute funds to
this league pool from the revenue it obtains from television contracts for
March Madness. There is symmetry in allowing the student-athletes
who generate the interest in the NCAA tournament to receive some financial return on their participation.
VI. CONCLUSION
The NBA and NCAA have each developed a regulatory framework that
supports their own organizational missions. Unfortunately, the welfare of
student-athletes is not a priority for either institution. The result is that
when NCAA student-athletes consider their entry into professional basketball, the rules that govern this transition significantly hamper their ability
to properly evaluate their options. Although the NBA and NCAA certainly
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should maintain their own priorities, this Article has suggested a few easy
remedies that would significantly enhance the ability of individual studentathletes to increase the likelihood that they are making the right decision
during this life-changing decision period.
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The Prospects for Protecting News Content Under
the Digital Millennium Copyright Act
Priya Barnes*
ABSTRACT
The DMCA was enacted to provide adequate legal safeguards against
piracy so that content producers, such as music, software, movie and other
media producers, would be incentivized to embrace the digital medium.
The antitrafficking provision, in particular, imposes civil and criminal sanctions on technology manufacturers who offer the means to circumvent content producers’ digital access controls.
Since its enactment, the DMCA’s antitrafficking provisions have been
invoked against hackers of digital music, movies and software. This article
weighs the prospects for applying the antitrafficking provisions against news
aggregators who access password protected digital news content for redistribution. It concludes that while the case law is mixed on specific interpretations of the DMCA’s antitrafficking provisions, its protections could be
invoked against news aggregators that bypass access controls without a news
website’s authorization to do so.
TABLE
OF
CONTENTS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II. SHOULD THE LAW PROTECT THE NEWS INDUSTRY AGAINST
NEWS AGGREGATORS ? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. The State of the News Industry . . . . . . . . . . . . . . . . . . . . . . .
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* 2012 Candidate for J.D., Marquette University Law School and Adjunct
Professor, Diederich College of Communications, Marquette University. I am
grateful to Michael M. O’Hear, associate dean for research and professor of law, and
Bruce Boyden, assistant professor of law, at Marquette University for their
comments on earlier drafts.
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B. The Relationship Between News Aggregators and News
Websites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. The Social Value of News Aggregators . . . . . . . . . . . . . . . . .
D. The Newspaper Industry Response . . . . . . . . . . . . . . . . . . . . . .
III. THE DIGITAL MILLENNIUM COPYRIGHT ACT . . . . . . . . . . . . . . .
A. History and Purpose of the DMCA . . . . . . . . . . . . . . . . . . . .
B. Content and Structure of Subsection 1201(a)(2) . . . . . . . . .
C. The Fair Use Concern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Overview of Case Law on (a)(2)(A) . . . . . . . . . . . . . . . . . . .
1. Offer, Provide, or Otherwise Traffic in Any
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Primarily Produced for Circumventing a
Technological Measure . . . . . . . . . . . . . . . . . . . . . . . .
3. Effectively Controls Access . . . . . . . . . . . . . . . . . . . . .
4. A Copyrighted Work . . . . . . . . . . . . . . . . . . . . . . . . .
E. Overview of Fair Use Case Law . . . . . . . . . . . . . . . . . . . . . .
IV. WHEN A NEWS AGGREGATOR DISTRIBUTES A NEWS WEBSITE ’S
PASSWORD -PROTECTED CONTENT , DOES SUBSECTION (a)(2)(A)
APPLY ? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. § 1201(a)(2)(A) Analysis . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Offer, Provide Or Otherwise Traffic In Any
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Primarily Produced For Circumventing A
Technological Measure . . . . . . . . . . . . . . . . . . . . . . . .
3. Effectively Controls Access . . . . . . . . . . . . . . . . . . . . .
4. A Copyrighted Work . . . . . . . . . . . . . . . . . . . . . . . . .
B. Fair Use Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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I. INTRODUCTION
In the modern era of digital news, once content leaves the confines of
an access-controlled website, traditional legal remedies come too late. The
unlimited ability to copy and distribute digital content means the content is
irretrievably lost. Traditional copyright law provides little or no safeguard
against the appropriation of a newspaper’s protected digital content.
In a hard copy world, newspapers had little reason for concern when
readers, critics, and commentators re-used content because the newspapers’
ability to distribute printed copies was inherently limited. Besides, such reuse was, more often than not, permissible because it promoted important
fair use principles. And if commercial entities with a wider reach appropri-
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203
ated newspaper content, traditional copyright law provided newspapers with
adequate remedies.1
The critics and commentators of today’s digital era are vast numbers of
bloggers, micro-bloggers, and ordinary social media users. The Internet enables them to distribute appropriated news content on a vast scale at virtually no cost. Important fair use principles are still at stake, but the
widespread dissemination of news content endangers the sustained ability of
newspapers to produce quality journalism. Their investment in reporting is
neither returned through controlled sales to subscribers and advertisers nor
recovered through licenses to authorized bloggers and users. Further up the
news chain, commercial news aggregators divert audiences from newspaper
websites and profit from the resulting traffic through advertising sales.2
Can newspapers prevent news aggregators from appropriating online
content by using new laws targeting digital piracy? Contrary to popular
belief, The Digital Millennium Copyright Act’s (DMCA’s) anticircumvention provisions3 protect more than just movies, music, and videogames from
piracy. Congress intended the act to protect a wide range of digital content,
including news.4 Nonetheless, scholarly debate to date on the DMCA’s anticircumvention provisions has typically featured digital music or videos in
its illustrations of the scope and magnitude of the piracy problem.5 This
article is the first to apply the DMCA’s anticircumvention provisions to
digital news content. Specifically, it assesses the prospects for applying the
DMCA’s antitrafficking provisions to news aggregators. Part II highlights
the tension between the social policies underpinning the antitrafficking provisions, which have the potential to stem the continued decline of the news
1
See Leonard Downie, Jr. & Michael Shudson, The Reconstruction Of American Journalism, 48 Colum. Journalism Rev. 28, 40 (2009) (explaining that current copyright law has not kept up with new issues raised in digital publishing).
2
See, e.g., Martin C. Langeveld, Online Payola? Rocking the ASCAP Mode, 143 Ed.
& Pub. 10, 10 (2010); Neil Weinstock Netanel, New Media in Old Bottles? Barron’s
Contextual First Amendment and Copyright in the Digital Age, 76 Geo. Wash. L. Rev.
952, 978–79 (2008).
3
17 U.S.C. §§ 1201–1205 et seq. (2000).
4
See S. Rep. No. 105-190, at 2, 8 (1998).
5
See generally Timothy K. Armstrong, Digital Rights Management and the Process of
Fair Use, 20 Harv. J.L. & Tech. 49, 60–65 (2006) (discussing digital rights management systems for music and video industries); R. Polk Wagner, Reconsidering the
DMCA, 42 Hous. L. Rev. 1107 (2005) (discussing the DMCA’s effect in limiting
the development of digital rights management technologies); Randal C. Picker,
From Edison to the Broadcast Flag: Mechanisms of Consent and Refusal and the Propertization of Copyright, 70 U. Chi. L. Rev. 281, 293 (2003) (discussing the propertization
of copyright in the music and video industries).
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industry, and the fair use value of news aggregators in disseminating information. Part III describes the historical circumstances leading up to the
enactment of the DMCA, its purpose and structure, and the case law interpreting the statute. Particular attention is paid to paragraph (a)(2) within
subsection 1201(a), which is the provision that potentially would apply to
news aggregators. Part IV assesses whether the simplest of technologies
commonly used by news websites, password protection schemes, are protectable under the DMCA. This paper concludes that liability under paragraph
(a)(2) could attach to a news aggregator that circumvents a password protection scheme on a news website.
II. SHOULD THE LAW PROTECT THE NEWS INDUSTRY
AGAINST NEWS AGGREGATORS ?
A. The State of the News Industry
While the many obituaries that have been written about the newspaper
industry are premature, virtually every trend for the industry, be it circulation, revenue, or employment, points to an existential crisis. Total paid
circulation for U.S. daily newspapers peaked in 1987 at sixty-three million.6
Circulation in 2009 stood at forty-six million, a twenty-seven percent decline over twenty-two years.7 Total advertising revenues for newspapers
peaked in 2000 at $49 billion but declined to $26 billion in 2010, representing a forty-seven percent reduction over half as much time.8 Full-time
employment in America’s newsrooms has declined by twenty-six percent
since 2001,9 bringing their totals to a level last seen in the mid-1970s.10
Newspapers have struggled to respond. Recognizing the audience-shift
from print to online media, newspapers went online as quickly as they
6
Newspaper Circulation Volume, 1940–2009, 2010 Ed. & Pub. Int’l Y.B., reprinted in Newspaper Ass’n of Am., http://www.naa.org/Trends-and-Numbers/
Circulation/Newspaper-Circulation-Volume.aspx (last visited November 10, 2011).
7
Id.
8
See Newspaper Ass’n of Am., Advertising Expenditures, 1950–2010, http://
www.naa.org/Trends-and-Numbers/Advertising-Expenditures/Annual-All-Categories.aspx (last updated March 1, 2011).
9
See Am. Soc’y of Newspaper Eds., 2011 Newsroom Census, http://asne.org/
key_initiatives/diversity/newsroom_census/table_n.aspx (last visited November 10,
2011).
10
Press Release, American Society of Newspaper Editors, Decline in Newsroom
Jobs Slow, (April 11, 2010) (on file with author).
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205
could.11 They projected their advertising-based business model to an online
world and awaited the turnaround in advertising revenues. It never came.
In fact, the advertising-driven model for online journalism appears unlikely
to be viable at the same pre-digital levels due to a massive oversupply of
advertising venues.12
At stake in the industry’s shift to a digital product is the continued
flow of vital information that allows citizens to participate in a healthy civic
and social life.13 The press has always played a pivotal role in American
democracy. Even though the decline of newspaper audiences has been
matched by an increase in audiences for online and cable news sources, the
role of the newspaper as the primary source of independent, local news reporting remains unmatched.14 Policymakers, observers, and academics have
recognized the serious implications for democratic society if newspaper industry declines continue at their current pace. Congress held three hearings
in 2009 seeking solutions for the industry.15 A 2009 CQ Researcher report
on the future of journalism identified the crux of the concern: “[T]he decline of newspapers will leave citizens without sufficient information for effective self-government . . . and the fragmented nature of the Internet . . .
could turn the clock back to [a time when] readers read only publications
with which they agreed,” leading to a society primarily characterized by
divisive partisanship.16
11
See Tom Price, Future of Journalism, 19 CQ Researcher 273, 286 (2009).
Online ad revenue for newspapers was $3 billion in 2010, only twelve percent
of its total advertising revenue. See Newspaper Ass’n of Am., supra note 8. Newspaper ad revenue represented about a tenth of the total market for online advertising, reported to be $26 billion in 2010 by the Interactive Advertising Bureau.
Interactive Adver. Bureau, IAB Internet Advertising Revenue Report: 2010 Full Year
Results, 1, 6 (April 2011), available at http://www.iab.net/media/file/IAB_Full_year_
2010_0413_Final.pdf; see also Paul Farhi, Build That Pay Wall High, 31 Am. Journalism Rev. 22, 24 (2009); Price, supra note 11 at 276.
13
See Downie & Shudson, supra note 1, at 40.
14
See, e.g., Adam Lynn et al., Traditional Content Is Still King As The Source of
Local News and Information (May 21, 2008)(conference paper presented to the Int’l
Comm. Ass’n) (available at http://citation.allacademic.com//meta/p_mla_apa_research_citation/2/3/3/1/4/pages233147/p233147-1.php) (analyzing survey data on
media usage compiled by the Federal Communication Commission and a survey of
Internet web sites involved in the dissemination of local news).
15
Bruce W. Sanford et al., Saving Journalism With Copyright Reform and the Doctrine of Hot News, 26 Comm. Law. 8, 8 (2009).
16
Price, supra note 12, at 275.
12
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Some in the news industry have pointed to the rise of news aggregators
as the driving force behind the industry’s decline.17 Newspapers charge that
news aggregators violate their copyrights and engage in unfair competition
by copying and redistributing their stories without authorization or, more
importantly, payment.18 News organizations complain that commercial
news aggregators’ unauthorized and uncompensated use of their content
threatens the newspaper industry’s ability to produce quality journalism.19
B. The Relationship Between News Aggregators and News Websites
A news aggregator is a website that gathers information from multiple
primary sources to display it in a single site.20 Google News,21 Yahoo News,22
HuffingtonPost.com,23 and RealClearPolitics.com24 are a few examples of commercial news aggregators. News aggregators have been categorized as either
feed aggregators or specialty aggregators.25 Feed aggregators compile news
items from multiple sources across a wide variety of topics, while specialty
aggregators compile news items from multiple sources focused on a single
17
See, e.g., Downie & Shudson, supra note 1, at 40.
See, e.g., Jeffrey D. Neuburger, A Brief History of AP’s Battles with News Aggregators, PBS MediaShift (May 26, 2009), http://www.pbs.org/mediashift/2009/05/
a-brief-history-of-aps-battles-with-news-aggregators146.html; Editorial: Righting
Copyright, 142 Ed. & Pub. 12, 12 (2009).
19
See Maurice E. Stucke & Allen P. Grunes, Toward a Better Competition Policy for
the Media: The Challenges of Developing Antitrust Policies that Support the Media Sector’s
Unique Role in Our Democracy, 42 Conn. L. Rev. 101, 110–11 (2009).
20
Kimberley Isbell, The Rise Of the News Aggregator: Legal Implications And
Best Practices 2 (The Berkman Ctr. for Internet & Soc’y at Harv. Univ. ed., 2010).
21
Google News located online at http://news.google.com/, describes itself as “a
computer-generated news site that aggregates headlines from news sources worldwide, groups similar stories together and displays them according to each reader’s
personalized interests.” Google News, http://news.google.com/intl/en_us/
about_google_news.html (last visited December 5, 2011).
22
Yahoo News is located online at http://news.yahoo.com/.
23
Huffington Post, located online at http://www.huffingtonpost.com/, also creates original content.
24
RealClearPolitics, located online at http://www.realclearpolitics.com/, describes its method as follows: “RealClearPolitics features the most comprehensive
coverage online by selecting the best pieces, publishing columns from top syndicated authors and producing original content. RealClearPolitics editorial staff writes
over 30% of the daily content.” RealClearPolitics.com, http://www.realclear
politics.com/about.html (last visited December 5, 2011).
25
See Isbell, supra note 20, at 2–3.
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topic, partisan orientation, or geographic location.26 News aggregators can
also be either pure-play aggregators or hybrids. Pure-play aggregators republish or link to source website content, while hybrid aggregators equally
combine republishing and linking with original reporting and commentary.
RealClearPolitics.com is an example of a mostly pure-play, specialty aggregator. The large majority of its headlines, ledes,27 and full news stories are
gathered and displayed from multiple sources for political news.
RealClearPolitics.com derives revenue from advertising based on traffic to
its website and mobile applications. For some stories, a reader may click
through from a headline to a deep link within the source website, bypassing
the source website’s home page. In other cases, a reader may read the entire
story on RealClearPolitics.com without ever visiting the source website. From
the source website’s perspective, the diversion of audiences from its home
page in the case of deep links, or its entire website in the absence of any
links, represents lost advertising revenue.28 Audiences satisfied with Real
ClearPolitics.com’s snippets may never visit the source website at all, further
eroding the newspaper’s advertising revenues.29
Two additional factors are relevant in understanding the relationship
between news websites and news aggregators. First is the normative expectation that a newspaper’s website content should be free. Ironically, consumer expectations that online news content should be free were set by
newspapers themselves. Unlike the motion picture industry, which initially
resisted rushing to meet the demand for digital delivery without first ensuring that adequate legal and technological safeguards existed to protect
against unauthorized access,30 the newspaper industry entered the digital
delivery business without parallel concerns. Newspaper industry leaders
viewed digital delivery as a new distribution channel capable of driving advertising revenue growth.31 And from the start, consumers and intermediaries, like search engines and news aggregators, were able to access a
26
Id.
A lede is the introductory section of a news story that is intended to entice the
reader to read the full story. Merriam-Webster’s Collegiate Dictionary 709
(11th ed. 2003).
28
Netanel, supra note 2, at 979.
29
See id.
30
For example, the movie industry had pioneered the development of CSS, or
the Content Scramble System, to safeguard against unauthorized access of DVDs
even before the DMCA was passed. See Pamela Samuelson, DRM {and, or, vs.} the
Law, 46 Commc’ns of the ACM 41, 42–43 (2003).
31
See Downie & Shudson, supra note 1, at 32.
27
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newspaper’s digital content without being blocked by access control
schemes.
Second, news sites may strike licensing deals with news aggregators to
recapture lost revenues. Many newspapers have adopted licensing strategies
as a solution that seeks to equalize the high cost of news production borne
by newspapers with the low cost of distribution enjoyed by news aggregators.32 The DMCA’s penalty provisions may give the newspaper industry
powerful leverage in vigorously pursuing a licensing strategy with news
aggregators.33
To date, no DMCA antitrafficking claims have been brought against
news aggregators for circumventing a technological protection measure.
The few online copyright infringement lawsuits that have been brought
against news aggregators have been settled out of court.34 At least one such
agreement, between GateHouse Media and the parent company of the Boston
Globe, made reference to antitrafficking boundaries through the use of specific terms of art from the DMCA.35 The use of these terms of art suggest
that the industry is starting to include the DMCA in its store of legal strategies to protect against online infringement.
C. The Social Value of News Aggregators
News aggregation tools like Google News increase citizen access to the
“marketplace of ideas.”36 A competitive marketplace of ideas, characterized
by a wide number of antagonistic sources and the wide dissemination of
32
See Rick Edmonds, The Yahoo Partnership—Big Deal or No Big Deal?,
Poynter.org (Mar. 3, 2011), http://www.poynter.org/uncategorized/79437/theyahoo-partnership-big-deal-or-no-big-deal/.
33
See 17 U.S.C. §§ 1203, 1204 (2010) (providing civil and criminal penalties
for the unauthorized circumvention of technology measures protecting copyrightable works).
34
See, e.g., Neuberger, supra note 18 (discussing the New York Times Co.’s recent settlement with GateHouse Media from copyright litigation over the excerpting of GateHouse content on Boston.com, and the Associated Press’s
settlement from its copyright infringement lawsuit against the Moreover news aggregation service owned by Verisign); Isbell, supra note 20, at 4 (discussing the settlement agreement between Agence France Presse (AFP) and Google News from a
lawsuit alleging that Google News had infringed upon AFP copyrightable content).
35
The settlement agreement between the New York Times Co. and GateHouse
Media used the terms “technological protection measure” and “circumvention,”
both key terms in section 1201 of the DMCA. See infra p. 218–219.
36
See Stucke & Grunes, supra note 19, at 105–06.
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information, plays a central role in our democracy.37 The truth is most
likely to be revealed, and our social, political and cultural health most assured, when more ideas compete.38 News aggregators, by definition, are not
content creators. Nor do they necessarily increase the number or variety of
primary sources when they republish or rebroadcast information. They do,
however, extend the reach of these sources. More people receive information, which, in turn, spurs greater dialogue and discourse. News aggregators’ precise role in creating an engaged and informed electorate has not
been conclusively documented. Even so, its pipeline characteristic of increasing the reach of information among the electorate should be a fair use
concern.
Studies have shown that media markets characterized by less competition in ideas and low audience feedback are prone to supply-side bias.39
That is, markets in which one media voice dominates tend to have less objective coverage of political issues.40 In such markets, a news aggregator’s
effect of providing greater access to news sources may become vitally important. By increasing consumers’ choice of access to the same information,
news aggregators may provide a balancing pressure for dominant media to
be less biased in their coverage.
News aggregators also represent consumer interests by increasing the
variety and reach of information produced by large media corporations
among viewers, readers, and listeners. Policies that favor news aggregators
arguably protect these consumer interests over the interests of large media
corporations.41 Policies that protect newspapers against commercial news
aggregators assume that media corporations are the proper beneficiaries of
37
Id. at 106.
Accordingly, the Supreme Court has advocated broad constitutional protections for free expression, invalidating state actions that encroach on the widest possible dissemination of information. See, e.g., Police Dept. of City of Chicago v. Mosley,
408 U.S. 92, 95–96 (1972) (identifying “the continued building of our politics and
culture” as a raison d’etre for the right to freedom of expression and the basis for
invalidating a city ordinance prohibiting school picketing); New York Times Co. v.
Sullivan, 376 U.S. 254, 270 (1964) (describing “a profound national commitment
to the principle that debate on public issues should be uninhibited, robust, and
wide-open” in rejecting a public official’s libel action against a newspaper in the
absence of a showing of actual malice).
39
See Stucke & Grunes, supra note 19, at 119.
40
See id.
41
This argument presumes that news aggregators are not large media corporations themselves.
38
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free press protections.42 But defining commercial news aggregators’ use of
primary news sources as fair use makes consumers, such as bloggers and
other users, the beneficiaries of press freedoms.
On the other hand, an increasing number of specialty aggregators that
are highly partisan in their selection of news sources43 can lead to their online audiences experiencing even narrower, more distorted views of the
world.44 Fueled by the natural human tendency to associate with likeminded people, partisan specialty aggregators contribute to a closed “echochamber” effect, in which audiences subscribing to a particular worldview
grow more entrenched in their positions and farther apart from those with
competing views.45 Without the tempering effect of neutral news sources,
commentators worry that the echo chamber effect increases the rancorous
tenor of political discourse and ultimately prevents political compromise
and bipartisanship.46 Moreover, if news aggregators do indeed threaten the
primary source’s ability to produce quality information,47 news aggregators
may also contribute to the lowering of the level discourse in our democracy
by reducing the number of primary sources.
As the newspaper industry redefines its business model for the digital
age, one of the tools at its disposal is the Digital Millennium Copyright Act
(DMCA). The act was intended to protect digital content producers against
the unauthorized use and distribution of their copyrighted content. Newspapers have constitutionally mandated copyright protection for their originally compiled content. Their interest in receiving fair compensation, and
indeed survival, must be balanced with the public’s interest in the widespread dissemination of information. The news industry’s use of the DMCA
to enforce restrictions on news aggregator access could be permissible because the public interest served by aggregators is not prevented from being
achieved in other ways.
42
See Stucke & Grunes, supra note 19, at 106.
For example, HuffingtonPost.com is liberal and the DrudgeReport.com
is conservative. Eric Lawrence, John Sides & Henry Farrell, Self-Segregation or Deliberation? Blog Readership, Participation, and Polarization in American Politics, 8 Persp. on
Pol. 141, 147 (2010).
44
Price, supra note 11, at 278–79.
45
See id.
46
See id.
47
See supra p. 204–206.
43
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D. The Newspaper Industry Response
Like the movie and music industries in the 1990s, newspapers are now
revisiting the idea of digital access controls. Their experiments with establishing protective technology and licensing standards recalls the movie and
music industries’ experience with similar controls.48
In the music and movie industries, digital access control measures have
taken the form of encryption schemes,49 password and handshake routines,50
pay walls,51 and flag-based schemes.52 Newspapers have made preliminary
advances in establishing similar access control measures. For example, major
news websites condition full access to news content on a user’s creation of a
password-protected account.53 A few general interest newspapers, like the
New York Times, have launched digital pay walls to protect their content.54
48
See, e.g., Zachary M. Seward, Who, Really, is The Associated Press Accusing of
Copyright Infringement?, Nieman Journalism Lab (Aug. 14, 2009), http://www.
niemanlab.org/2009/08/who-really-is-the-associated-press-accusing-of-copyrightinfringement/; Samuelson, supra note 30, at 43 (noting that digital rights management can be mandated in two ways, a standard-setting process or public legislation).
49
Digital content protected by an encryption algorithm can only be unlocked by
designated or approved devices. For example, at one time Apple prevented users
from playing digital music downloaded through its iTunes online music store on
any device other than Apple iPods through the use of an encryption-based digital
rights management system. Press Release, Apple Unveils Higher Quality DRM-Free
Music on the iTunes Store, Apple (Apr. 2, 2007), available at http://www.apple.com/
pr/library/2007/04/02Apple-Unveils-Higher-Quality-DRM-Free-Music-on-theiTunes-Store.html.
50
Handshake routines require a device to transmit a secret handshake code,
which when recognized by a remote server, unlocks digital content. For example, a
streaming video player like RealPlayer transmits a recognized handshake to a server
(RealServer) before video streaming can commence. See RealNetworks, Inc. v.
Streambox, Inc., No. 2:99CV02070, 2000 WL 127311, *2–3 (W.D. Wash. Jan. 18,
2000)
51
Pay walls condition access to copyrightable digital content upon payment of a
subscription fee. For example, the Thomson Reuters’ Westlaw website is guarded
by a pay wall that grants users access to content only upon payment of the requisite
subscription fee.
52
Flag-based schemes require a hardware device to respond to digital flags or
codes embedded in transmitted data in a prescribed manner. For example, a broadcast flag may require a video receiver to prevent display of unauthorized broadcast
content.
53
See, e.g., The Washington Post, http://www.washingtonpost.com.
54
Arthur Sulzberger, Jr., Letter to Our Readers: Times Begins Digital Subscriptions,
N.Y. Times (Mar. 28, 2011), http://www.nytimes.com/2011/03/28/opinion/
l28times.html.
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Others are striking deals with device manufacturers, like Apple, to make
exclusively licensed content available on their devices, like Apple’s iPad.55
On the legal front, news organizations are beginning to utilize the anticircumvention protections of the DMCA. The recent case of appropriated
online articles from GateHouse Media’s “Wicked Local” sites provides an
example.56 GateHouse Media publishes geographically targeted print newspapers for the Waltham, Needham and Newton communities in Massachusetts, along with corresponding online newspapers commonly known as the
Wicked Local sites for each community.57 In 2008, the Globe Newspaper
Company (“Globe”) started displaying the headlines and ledes from the
Wicked Local sites on Boston.com, including deep links to the Wicked Local
sites.58 GateHouse Media brought a copyright infringement action against
Globe.59 The suit was eventually settled out of court.60 While the action
was not brought under the DMCA, the settlement agreement outlined
broad provisions for ongoing compliance with preventative technological
measures, as defined under the DMCA.61
Newspaper industry leaders are attempting to build industry-wide support for uniform digital rights management standards. Their efforts parallel
the momentum leading up to the agreement between the motion picture
and consumer electronics industries to adopt CSS, or Content Scrambling
System, as the de facto encryption standard for controlling the distribution of
home movies on DVDs.62 For example, in 2006, a coalition of international
publishers announced the creation of Automated Content Access Protocol
(“ACAP”). ACAP consists of digital code embedded in news websites to
instruct search engines on copyrighted content use.63 In 2009, Associated
55
News Corp., Apple Join to Launch iPad-Exclusive News App ‘The Daily’, Fox
News (Feb. 2, 2011), http://www.foxnews.com/scitech/2011/02/02/news-corp-apple-prepare-unveil-ipad-news-service-daily/.
56
Amended Complaint at 2–3, GateHouse Media Mass I, Inc. v. N.Y. Times
Co., No. 1:08-12114-WGY, 2009 WL 301807 (D. Mass. Jan. 22, 2009).
57
Id.
58
Id. at 9–10.
59
Id. at 4.
60
Settlement Agreement, GateHouse Media Mass I, Inc. v. N.Y. Times Co., No.
1:08-12114-WGY(D. Mass. Jan. 25, 2009).
61
Id. at § 1 (memorializing the parties’ agreement to implement “commercially
reasonable technological solutions” that neither party would “directly or indirectly
circumvent”).
62
See Samuelson, supra note 30, at 43.
63
Noam Cohen, Paying for Free Web Information, N.Y. Times, Dec. 10, 2007, at
C4.
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Press (“AP”) announced the creation of a digital news registry using a
microformat known as hNews.64 A microformat is a type of digital code
that allows a news website’s content to be tagged with copyright management and other information.65 Most recently, AP announced the creation of
an independent rights clearinghouse to manage the licensing of news content using its digital news registry.66
Over the last decade, courts have considered the scope of protection for
many of these forms of technological protections under the anticircumvention provisions of the DMCA, mostly in the context of the movie, gaming,
and music industries. Whether a court will allow a newspaper to make a
DMCA claim against a news aggregator remains to be seen.
III. THE DIGITAL MILLENNIUM COPYRIGHT ACT
A. History and Purpose of the DMCA
The Digital Millennium Copyright Act (DMCA) was the entertainment industry’s response to digital pirates. Entertainment industry fears of
mass piracy stemming from the ease and speed of sharing digital files, like
MP3s and DVDs, prompted Congress to pass the DMCA.67
Congress also desired to update the U.S. copyright regime to suit the
demands of a new era.68 Accordingly, the anticircumvention provisions of
64
Press Release, Associated Press, AP to Build News Registry to Protect Content (July 23, 2009) (on file with author).
65
See Langeveld, supra note 2, at 10.
66
Press Release, Associated Press, AP to Pursue Creation of Rights Clearinghouse to Help News Organizations License Digital Content (Oct. 18, 2010) (on file
with author). ACAP, hNews, and the AP digital news registry are technologies that
clearly respond to section 1202 of the DMCA. Section 1202 prohibits the falsification, alteration, or removal of copyright management information in digital content. 17 U.S.C. §§ 1202(a)– (b) (2006).
67
See, e.g., H.R. Rep. No. 105-551, pt. 2, at 23 (1998); S. Rep. No. 105-190,
at 7 (1998).
68
H.R. Rep. No. 105-551, pt. 1, at 10 (1998). Another impetus for the DMCA was
the need to comply with two international treaties dealing with copyright in a
borderless digital era. See id. at 11. The WIPO Copyright Treaty and the WIPO
Performances and Phonograms Treaty contain substantively identical anti-circumvention provisions as the DMCA. For instance, Article 11 of the Copyright Treaty
provides:
Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by
authors in connection with the exercise of their rights under this treaty of the Berne
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the DMCA introduced new legal deterrents against unauthorized access of
digital works.69 Its goal was to modernize traditional copyright law, which
targeted only the unauthorized copying or distribution of digital files.70
The DMCA targets individuals or organizations that break digital controls
designed to prevent unauthorized access of files. It is an attempt to protect
the locks on the proverbial barn door in order to prevent the content horse
from leaving in the first place. Traditional copyright still protects the content horse, but now the DMCA also protects the locks on the barn door.
Under the DMCA, it is illegal to circumvent “technological measures” intended to “control access” and “protect rights” to copyrighted works in
digital form.71
The drafters specifically had DVDs encrypted with CSS in mind while
drafting section 1201. Movie industry executives saw the enormous potential of CSS-encrypted DVDs, which were launched in the late 1990s. Encrypted DVDs allowed them to retain full control of home movie releases of
their movie because only licensed hardware manufacturers could produce the
CSS-encrypted DVDs.72 But movie industry executives also realized that
the encryption scheme inevitably would be hacked. They went to Congress
for help in securing added legal assurances that made the civil and criminal
cost of hacking high.73 These assurances simply did not exist in then-current copyright law.
The movie industry’s worst nightmare came true almost immediately.
In 1999, a Norwegian teenager developed “DeCSS.” DeCSS allows a user to
decrypt the contents of a CSS-encrypted DVD.74 Combined with advancements in video file compression and peer-to-peer digital distribution, DeCSS
effectively circumvented the movie industry’s supposedly airtight technol-
Convention and that restrict acts, in respect of their works, which are not authorized
by authors concerned or permitted by law.
WIPO Copyright Treaty, art. 11, Apr. 12, 1997, S. Treaty Doc. No. 105-17.
69
17 U.S.C. §§ 1201–1205 (2006).
70
See Universal City Studios, Inc. v. Corley, 273 F.3d 429, 435 (2d Cir. 2001).
71
See §§ 1201–1205. The Federal Circuit has said that prior to the passage of
Title I of the Digital Millennium Copyright Act in 1998, “a copyright owner
would have had no cause of action against anyone who circumvented any sort of
technological control, but did not infringe.” Chamberlain Group, Inc. v. Skylink
Techs., Inc., 381 F.3d 1178, 1195–96 (Fed. Cir. 2004).
72
Armstrong, supra note 5, at 61 n.49.
73
17 U.S.C. § 1203 creates civil remedies and § 1204 provides criminal sanctions for DMCA violations.
74
See Armstrong, supra note 5, at 61 n.49.
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ogy scheme.75 At that point, reprogramming of DVD players to defeat
DeCSS was an expensive and impractical solution for an industry deeply
invested in the existing system.76 The movie industry filed one of the first
major DMCA lawsuits against a defendant who had posted a link to DeCSS
on a website popular with the hacking community. A New York district
court ruled in favor of the movie industry in Universal City Studios, Inc. v.
Reimerdes, and the Second Circuit affirmed the decision in Universal City
Studios, Inc. v. Corley.77 These early cases provided a swift kick-off for the
rich and checkered series of judicial interpretations of the DMCA’s antitrafficking provisions over the next decade.
Although Congress drafted the DMCA with CSS-encrypted DVDs in
mind, the anticircumvention protections apply to the wider variety of online
content traditionally protected under the Copyright Act.78 The legislation’s
aim was to “protect[ ] and create[ ] the legal platform for launching the
global digital online marketplace for copyrighted works[,] . . . [including]
movies, music, software, and literary works.” 79 News articles qualify as “a
work protected under this title”80 as compilations that reflect an author’s
original expression and that are more than discovered facts alone.81
Like prior major amendments to the copyright regime, the DMCA reflects the constitutionally derived balance that Congress sought to strike
between the rights of content owners with the rights of viewers, readers, and
listeners. But unlike prior amendments, the DMCA regulated devices for
the first time.82 In fact, the DMCA’s reach over device regulation led to a
75
See id.
See id.
77
See Universal Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294 (S.D.N.Y.
2000), aff’d, 273 F.3d 429 (2d Cir. 2001).
78
See S. Rep. No. 105-190, at 1 (1998).
79
Id. (emphasis added).
80
17 U.S.C. § 1201(a)(1)(A) (2006).
81
17 U.S.C. § 102(a) (1994) defines copyrightable subject matter to include
“original works of authorship fixed in any tangible medium of expression . . . includ[ing] (1) literary works” and §102(b) clarifies that copyright protection is not
extended to “discovery” or facts. See also Int’l News Service v. Associated Press, 248
U.S. 215, 234 (1918) (identifying news articles with a “particular form or collocation of words in which the writer has communicated [the substance of the information]” as being unquestionably the subject of copyright).
82
In a Sept. 16, 1997, letter to Congress, sixty-two copyright law professors
expressed their concerns about the bill being “an unprecedented departure into the
zone of what might be called paracopyright—an uncharted new domain of legislative provisions designed to strengthen copyright protection by regulating conduct
76
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struggle for control over the bill between the House Judiciary Committee,
which typically oversees intellectual property, and the House Commerce
Committee, which viewed device regulation as its turf.83
One issue that attracted substantial commentary surrounded what
then-Senator Ashcroft described as “the specter of moving our nation towards a ‘pay-per-use’ society.”84 As the Ninth Circuit has explained, “Congress was particularly concerned with encouraging copyright owners to
make their works available in digital formats such as ‘on-demand’ or ‘payper-view,’ which allow consumers effectively to ‘borrow’ a copy of the work
for a limited time or a limited number of uses.”85 In comparison, when
consumers used to buy the videocassette of a movie or the audiocassette of an
album, they were not restricted to playing them only a specified number of
times or on specified types of devices. Ashcroft’s “specter” of a pay-per-use
society was a reference to the way in which the DMCA would usher in a
fundamentally different era that could greatly favor the copyright owner at
the expense of the copyright user. Today, the digital age permits content
producers to market their products incrementally, thereby maximizing their
ability to generate revenues from the same products. The copyright industry wanted Congress to solidify this possibility in the originally drafted version of the bill.
The original bill leading up to the DMCA was far more pro-copyright
owner than what was finally enacted; it granted greater fair use protections
for copyright users by the time the bill made its way through the House
Judiciary and Commerce Committees. One such change was delegating au-
which traditionally has fallen outside the regulatory sphere of intellectual property
law.” H.R. Rep. No. 105-551, pt. 2, at 31 (1998).
83
The Commerce Committee had unsuccessfully sought to remove the anti-circumvention provisions from Title 17 altogether on the grounds that it had nothing
to do with copyright:
H.R. 2281, as reported by the Committee on the Judiciary, would regulate—in the name of copyright law—the manufacture and sale of devices
that can be used to improperly circumvent technological protection measures. The Committee on Commerce adopted an amendment that moves
the anti-circumvention provisions out of Title 17 and establishes them as
freestanding provisions of law. The Committee believes that this is the
most appropriate way to implement the treaties, in large part because
these regulatory provisions have little, if anything, to do with copyright
law. H.R. Rep. No. 105-551, pt. 2, at 23–24 (1998).
84
144 Cong. Rec. S11887-01 (daily ed. Oct. 8, 1998) (statement of Sen.
Ashcroft).
85
MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 947 (2011).
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thority to the Librarian of Congress for authorizing fair use exceptions every
three years.86 As Senator Ashcroft summarized:
Under the compromise embodied in the conference report, the Librarian of
Congress would have authority to address the concerns of libraries, educational institutions, and other information consumers potentially
threatened with a denial of access to categories of works in circumstances
that otherwise would be lawful today. I trust that the Librarian of Congress will implement this provision in a way that will ensure information
consumers may exercise their centuries-old fair use privilege to continue to
gain access to copyrighted works.87
The Librarian of Congress has identified several exceptions in the last decade, including the recent widely reported exception permitting jailbreaking
the iPhone or other cell phone operating systems to run unauthorized apps
upon switching cellular service providers.88 The jailbreaking exception reflected the policy of prohibiting the improper use of copyright law to control the after-sale use of devices.
Even though the concern for protecting fair use is both expressly enunciated in section 1201 as well as supported in the legislative reports, critics
continue to hold that the DMCA fair use safeguards are inadequate. The
two competing policy paradigms that Congress weighed in drafting the
DMCA are playing out in today’s pay-per-view model of news delivery: one,
that fair use is a remnant of a time when small uses could not be efficiently
managed and paid for, a problem that is overcome in the digital world; the
other, that fair use of copyrighted material must be especially protected in a
pay-per-view digital world.89 Legislative compromises made during the
DMCA’s enactment were partially intended to mitigate the latter concern,
described as “the specter . . . of a ‘pay-per-use’ society” by Senator Ash-
86
17 U.S.C. § 1201(a)(1)(C) (2006).
144 Cong. Rec. S11887-01 (daily ed. Oct. 8, 1998) (statement of Sen. Ashcroft). One of Senator Ashcroft’s key concerns was to also “ensure that . . . section
1201(a) did not inadvertently make it unlawful for parents to protect their children
from pornography . . . or have unintended legal consequences for manufacturers of
products designed solely to enable parents to protect their children in this fashion.”
S. Rep. No. 105-190, at 13. Senators Ashcroft, Leahy and Hatch sponsored the exception
for the protection of minors contained in § 1201(k).
88
See Exemption to Prohibition on Circumvention of Copyright Protection Systems for Access Control Technologies, 75 Fed. Reg. 43,825, 43,831 (July 27,
2010).
89
David Nimmer, Appreciating Legislative History: The Sweet and Sour Spots of the
DMCA’s Commentary, 23 Cardozo L. Rev. 909, 967 (2002).
87
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croft.90 But Congress also recognized that technological advancements
could make the pay-per-use model practical, efficient, and equitable.91 As
David Nimmer has argued, the pay-per-use model was not rejected because
Congress outlawed it but because of technology limitations; future developments in technology could still make it practicable.92 Scholars who place a
high value on authors’ rights praise the fact that the DMCA’s protection for
technological measures has fostered new business models to bring content to
consumers at a variety of price point options.93 These scholars argue that
critics’ fears of content being locked up behind digital walls simply have not
materialized94 or that the DMCA, by now permitting microconsent through
technology—something that though possible was impractical to do through
traditional licensing contracts—increases the incentives for creation and expands product diversity.95
Ultimately, the DMCA received the support of a wide variety of stakeholders with otherwise divergent interests.96 Signed into law in October
90
Ashcroft).
91
The House Commerce Committee, which was particularly concerned with
preserving fair uses, described the importance of developing a legal framework that
was flexible enough to keep pace with technological advancements:
[A] plentiful supply of intellectual property—whether in the form of
software, music, movies, literature, or other works—drives the demand for
a more flexible and efficient electronic marketplace. As electronic commerce and the laws governing intellectual property (especially copyright
laws) change, the relationship between them may change as well. . . . [For]
example, an increasing number of intellectual property works are being
distributed using a “client-server” model, where the work is effectively
“borrowed” by the user (e.g., infrequent users of expensive software
purchase a certain number of uses, or viewers watch a movie on a pay-perview basis). To operate in this environment, content providers will need
both the technology to make new uses possible and the legal framework to
ensure they can protect their work from piracy. H.R. Rep. No. 105-551,
pt. 2, at 23 (emphasis added).
92
Nimmer, supra note 89, at 967–68.
93
Jane C. Ginsberg, Legal Protection of Technological Measures Protecting Works of
Authorship: International Obligations and the US Experience, 29 Colum. J.L. & Arts 11,
12 (2005).
94
Id.
95
See Randal C. Picker, From Edison to the Broadcast Flag: Mechanisms of Consent
and Refusal and the Propertization of Copyright, 70 U. Chi. L. Rev. 281, 293–96
(2003).
96
Senator Kohl’s statement reflects the scale of the collaboration that was involved across many industries beyond the content owning industries:
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1998 by President Clinton, the DMCA took the form of five titles. Section
1201, contained in the first title, is codified in Title 17 of the U.S. Code. It
aimed to provide a remedy for digital piracy by creating an anticircumvention right for copyright owners who use technological measures to protect
their works.97 It also prohibited trafficking in devices that allow the public
to circumvent protected works.98 Section 1202 gives copyright owners enforcement rights for misuse of copyright management information included
in their digital works.99 Title II, added to Section 512 of the Copyright
Act, immunizes Internet service providers from circumvention liability
when they cooperate with copyright owners to detect and deal with online
infringement.100 Titles III and IV deal with exemptions from the anticircumvention provisions for service and repair, libraries and archives engaged
in preserving works, and providers transmitting ephemeral reproductions.101
B. Content and Structure of Subsection 1201(a)(2)
Paragraph (a)(2) and more specifically (a)(2)(A), which prohibits trafficking in devices that circumvent access controls,102 is the main focus of
this article. Paragraph (a)(2)(A) reads:
(2) No person shall manufacture, import, offer to the public, provide, or
otherwise traffic in any technology, product, service, device, component, or
part thereof, that—
[The DMCA] is the product of intensive negotiations between all of the interested
parties—including the copyright industry, telephone companies, libraries, universities and device manufacturers. And virtually every major concern raised during that
process was addressed.
144 Cong. Rec. S11887-01 (daily ed. Oct. 8, 1998) (statement of Sen. Kohl).
97
See 17 U.S.C. § 1201(a)(1) (2006).
98
See § 1201(a)(2).
99
See § 1202 (2006).
100
See 17 U.S.C. § 512 (2006).
101
Leahy). Additionally, Title IV protects webcasting rights for sound-recording copyright owners, and Title V protects boat hull design rights. Id.
102
This is the second of three main prohibitions created in section 1201. The
first bans the act of circumvention to gain access to a copyrighted work.
§ 1201(a)(1)(A). The third bans trafficking in devices that enable someone to circumvent a technological measure protecting a rights control in a copyrighted work.
§ 1201(b)(1)(A).
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(A) is primarily designed or produced for the purpose of circumventing a
technological measure that effectively controls access to a work protected
under this title[.]103
Paragraph 1201(a)(2) bans trafficking in devices designed to permit someone to circumvent a technological measure protecting access to a copyrighted
work.104 The plain language of the statute does not explicitly require an
underlying copyright violation for anticircumvention liability to attach
under any of the circumvention prohibitions of the DMCA.105 The true
focus of the DMCA is therefore not the copyrighted work itself, but rather
the lock on the barn door.106 Nevertheless, the protection can only be invoked when the right protected by the lock is a work protected under the
Copyright Act.107
News aggregators potentially fall within the scope of paragraph (a)(2)
as traffickers if their programs allow users to access copyrighted news content protected by a technological measure against unauthorized access. Liability under paragraph (a)(2) requires a plaintiff to show that news
aggregators meet the following elements:
(1)
(2)
(3)
(4)
103
Offer to the public, or provide any technology
Primarily produced for circumventing a technological measure
Effectively controls access
A copyrighted work.108
§ 1201(a)(2)(A)
§ 1201(a)(2).
105
See §§ 1201(a)–(b).
106
In this sense, the DMCA is a new protection. Recently, the Ninth Circuit
recognized that because neither subsection 1201(a)(1) nor 1201(a)(2) “explicitly refers to traditional copyright infringement under § 106[,] . . . we read this term as
extending a new form of protection, i.e., the right to prevent circumvention of
access controls, broadly to works protected under Title 17, i.e., copyrighted works.”
MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 945 (9th Cir. 2011). The
Federal Circuit has, however, declined to go as far as recognizing a separate right in
the anti-circumvention provisions, characterizing it as simply a new way that property owners can secure their property against “digital trespass.” Chamberlain
Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1193–96 (Fed. Cir. 2004). The
practical significance of this distinction has yet to play out fully in the courts, but it
reflects the classic tension between the rights of copyright owners versus the rights
of copyright users.
107
17 U.S.C. § 1201(a)(1)(A); see also Chamberlain, 381 F.3d at 1199; Lexmark
Int’l, Inc. v. Static Control Components, Inc., 387 F.3d 522, 547 (6th Cir. 2004).
108
See MDY Indus., 629 F.3d at 953 (identifying six elements of a paragraph
(a)(2) claim, which are collapsed into four in this paper).
104
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Two additional provisions are relevant here. Paragraph (a)(3)(A) defines
“circumventing a technological measure” to mean “to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, bypass,
remove, deactivate, or impair a technological measure, without the authority
of the copyright owner[.]”109 The statute does not define “technological
measure”, but paragraph (a)(3)(B) provides the criteria to be used to determine whether a technology measure controls access to a work: “[A] technological measure ‘effectively controls access to a work’ if the measure, in the
ordinary course of its operation, requires the application of information, or a
process or a treatment, with the authority of the copyright owner, to gain
access to the work.”110
Also relevant to news aggregators are the fair use provisions of the
DMCA. Paragraph 1201(c)(1) states, “[n]othing in this section shall affect
rights, remedies, limitations, or defenses to copyright infringement, including fair use, under this title.”111
C. The Fair Use Concern
News aggregators may argue that excerpting news articles along with a
link to the original source constitutes fair use. Fair use is a pedigreed body
of common law that was codified in the 1976 Copyright Act.112 It circumscribes the exclusive rights of a copyright holder by allowing others to make
use of portions of the copyrighted work for certain purposes.113 Courts apply a four-factor test to determine whether a particular use is justified as fair
use. The factors, codified in law, are:
1. The purpose and character of the use, including whether it is of a
commercial nature or for nonprofit, educational purposes
2. The nature of the copyrighted work;
3. The amount and substantiality of the portion used in relation to
the copyrighted work as a whole;
4. The effect of the use upon the potential market for or value of the
copyrighted work.114
109
§ 1201(a)(3)(A).
§ 1201(a)(3)(B).
111
§ 1201(c)(1) (emphasis added); the doctrine of fair use is codified in 17
U.S.C. § 107.
112
See 17 U.S.C. §107 (1994).
113
See id. Section 107 lists such purposes as “criticism, comment, news reporting, teaching . . . scholarship, or research.” Id.
114
Id.
110
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Fair use concerns made frequent appearances during Congress’s deliberations
on the DMCA.115 Access control protections were intended to ensure that
copyright owners received payment for the access.116 But Congress also
sought to ensure that the anticircumvention provisions in Section 1201 did
not undermine the fair use of information protected under the Copyright
Act.117 Paragraph 1201(c)(1) expressly states that the DMCA leaves the fair
use defense fully in force with regard to digital content.118 The Senate Judiciary Committee further clarified that paragraph (c)(1):
[d]oes not amend section 107 of the Copyright Act, the fair use provision.
The Committee determined that no change to section 107 was required
because section 107, as written, is technologically neutral, and therefore,
the fair use doctrine is fully applicable in the digital world as in the analog
world.119
While fair use immunizes direct acts of circumvention by users, it does not
immunize the facilitation of circumvention by device manufacturers.120 Paragraph 1201(a)(1), which covers direct acts of circumvention, contains several fair use exemptions and procedures.121 Courts have viewed the
placement of these fair use provisions under paragraph (a)(1) and their omission under paragraph (a)(2), which covers trafficking in circumvention devices, as evidence of Congress’s intent that a device is not exempted from
circumvention liability by virtue of its permitting fair uses.122 The House
115
The term “fair use” appears nine times in the House Judiciary Committee
Report, twenty-one times in the House Commerce Committee Report, and fourteen
times in the Senate Report.
116
See H.R. Rep. No. 105-551, pt. 1, at 10 (1998).
117
Id. at 26.
118
17 U.S.C. § 1201(c)(1) (2006) (“Nothing in this section shall affect rights,
remedies, limitations, or defenses to copyright infringement, including fair use,
under this title.”). Subsection (c)(4) also provides that “[n]othing in this section
shall enlarge or diminish any rights of free speech or the press for activities using
consumer electronics, telecommunications, or computing products.” § 1201(c)(4).
The Senate Judiciary Committee clarified that “these provisions are intended to
ensure that none of the provisions in section 1201 affect the existing legal regime
established in the Copyright Act and case law interpreting that statute.” S. Rep.
No. 105-190, at 30 (1998).
119
S. Rep. No. 105-190, at 23–24 (1998) (emphasis added).
120
H.R. Rep. No. 105-551, pt. 2, at 18 (1998).
121
§ 1201(a)(1)(B)–(E).
122
See Universal City Studios, Inc. v. Corley, 273 F.3d 429, 444 (2d Cir. 2001)
(explaining that authorization granted by a copyright owner for a direct act of circumvention cannot be a defense to a trafficking claim); Universal City Studios, Inc.
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Committee on the Judiciary noted that the net effect of the law for consumers is that they “would not be able to circumvent in order to gain unauthorized access to a work, but would be able to do so in order to make fair use
of a work which [they have] acquired lawfully.”123 Therefore, individual
consumers of news content would not be prevented from circumventing access controls for fair uses of the news content. However, device manufacturers would have no immunity flowing to them from a user’s circumvention
for permissible fair use purposes.
Opinion has diverged on the DMCA’s aims as it pertains to fair use.
Some critically observe that the law grants content owners perpetual protection by permitting them to lock up their works in combination with public
domain works behind digital pay walls.124 They argue that the resulting
protection is overbroad as it violates the constitutional mandate to free content for public access after a limited period of exclusive control.125 Others
argue that Congress intended to protect content owners’ emerging business
models in the digital age, including pay-per-use models that had become
possible through advancements in technology for collecting micropayments
efficiently.126
v. Reimerdes, 111 F. Supp. 2d 294, 324 (S.D.N.Y. 2000) (explaining that the substantial noninfringing uses that a consumer could make with the trafficking device
cannot absolve a trafficking claim), aff’d, 273 F.3d 429 (2d Cir. 2001). But see
Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1196 n.13 (Fed.
Cir. 2004) (explaining that “[f]or obvious reasons, § 1201(a)(2) trafficking liability
cannot exist in the absence of § 1201(a)(1) violations”). In Chamberlain, the Federal
Circuit’s view of 1201(a)(2)(A) trafficking liability as a form of indirect or vicarious
liability is neither consistent with plain language nor congressional intent. It is also
not reconcilable with § 1201(c), which identifies “[o]ther rights, etc., not affected”
and states in part that “[n]othing in this section shall enlarge or diminish vicarious
or contributory liability for copyright infringement in connection with any technology, product, service, device, component, or part thereof.” § 1201(c).
123
H.R. Rep. No. 105-551, pt. 1, at 18 (1998) (explaining that subsection (a)(1)
does not apply to subsequent acts after the user has gained access to the work).
124
See David Nimmer, A Riff on Fair Use in the Digital Millennium Copyright Act,
148 U. Pa. L. Rev. 673, 711-12 (2000).
125
See Pamela Samuelson, Intellectual Property and the Digital Economy: Why the
Anti-Circumvention Regulations Need to Be Revised, 14 Berkeley Tech. L.J. 519, 524
(1999).
126
See Ginsberg, supra note 93, at 12.
R
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D. Overview of Case Law on (a)(2)(A)
The DMCA is only a decade old.127 While the case law on the DMCA
is still in its infancy, numerous district courts and circuits have interpreted
its antitrafficking provisions. The following elemental analysis parallels the
four elements required for a paragraph 1202(a)(2) violation, as enumerated
in section II (B) above.128
1. Offer, Provide, or Otherwise Traffic in Any Technology
An (a)(2)(A) claim requires that the defendant “offer to the public,
provide, or otherwise traffic in any technology, product, service, device,
component, or part thereof.”129 The Reimerdes court offered the following
common-meaning explanation of the verbs in this provision:
To “provide” something, in the sense used in the statute, is to make it
available or furnish it. To “offer” is to present or hold it out for consideration. The phrase “or otherwise traffic in” modifies and gives meaning to
the words “offer” and “provide.” In consequence, the anti-trafficking provision . . . is implicated where one presents, holds out or makes a circumvention technology or device available, knowing its nature, for the purpose
of allowing others to acquire it.130
The anticircumvention provisions don’t just implicate physical devices.
While Congress did state that this language was “drafted carefully to target
‘black boxes,’” 131 the statute is explicitly worded to reach a broad variety of
technologies, from hardware devices to software programs and components.132 A broad range of technologies fall within the orbit of the antitrafficking provision. Automated bot programs that allow users to play online
games by circumventing access controls count as trafficking.133 Mere posting and hyperlinking may also count as providing or trafficking within the
127
Enacted in the 105th Congress in 1998, the DMCA went into effect January
1, 2000.
128
See supra p. 220.
129
17 U.S.C. § 1201(a)(2) (2006).
130
Universal City Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294, 325
(S.D.N.Y 2000), aff’d, 273 F.3d 429 (2d Cir. 2001).
131
S. Rep. No. 105-190, at 29 (1998).
132
H.R. Rep. No. 105-551, pt. 1, at 18 (1998).
133
See MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 953 (9th Cir.
2011) (finding Glider, a bot program that facilitates playing the online game, World
of Warcraft, to be a circumventing technology).
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meaning of the DMCA.134 In Corley, the Second Circuit held that a defendant violated the DMCA by posting hyperlinks to the DeCSS program on a
website devoted to the hacking community.135 More recently, a California
district court held that an Internet browser tool, requiring human interaction, that allowed users to buy tickets in bulk from a variety of websites, was
a trafficking technology.136
2. Primarily Produced for Circumventing a Technological Measure
Paragraph (a)(2)(A) requires that the defendant’s technology be “primarily designed or produced for the purpose of circumventing a technological measure . . . .”137 A plaintiff must prove that its technological
protection measure was the primary target of the defendant’s circumventing
technology.138 The Ninth Circuit in MDY Industries v. Blizzard Entertainment held that the automated program, Glider, was primarily designed to
circumvent a technological measure because it was marketed that way and
because it did not have any other use or purpose than to circumvent the
plaintiff’s World of Warcraft access-restriction technology.139
But what is a “technology measure?” The DMCA does not provide a
definition for the term. Congress deliberately sought to avoid defining specific standards for technology protection measures.140 In Congress’ judg134
See Universal City Studios, Inc. v. Corley, 273 F.3d 429, 454 (2d Cir. 2001).
See id.
136
Ticketmaster, LLC v. RMG Techs., Inc., 507 F. Supp. 2d 1096, 1111–12
(C.D. Cal. 2007).
137
17 U.S.C. § 1201(a)(2)(A) (2006).
138
Id.; see also Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178,
1202 (Fed. Cir. 2004) (explaining that the plaintiff has this burden of proof).
139
MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 953 (9th Cir.
2011). These two grounds—any other use/purpose and method of marketing—
implicate § 1201(a)(2)(B) and (C), respectively.
140
The concern is evident in numerous references to preserving industry’s voluntary process for establishing technology standards in the Senate Judiciary Committee report on the DMCA. See S. Rep. No. 105-190, at 37–38, 52 (1998). Senator
Leahy further elaborated this concern during debates on the DMCA that its provisions should not be interpreted to establish “a precedent for Congress to legislate
specific standards or specific technologies to be used as technological protection
measures, particularly with respect to computers and software” and adding that
“[g]enerally, Congress should not establish technology specific rules; technology
develops best and most rapidly in response to marketplace forces.” 144 Cong. Rec.
S11887-01 (daily ed. Oct. 8, 1998) (statement of Sen. Leahy).
135
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ment, such standards were better left to market forces.141 In its view,
minimalist technological measures, like password protection schemes, could
qualify for anticircumvention protection. One of the first examples of circumventing a technological measure cited by the Senate Judiciary Committee was the evasion of password protection:
For example, if unauthorized access to a copyrighted work is effectively
prevented through use of a password, it would be a violation of this section
to defeat or bypass the password and to make the means to do so, as long as
the primary purpose of the means was to perform this kind of act. This is
roughly analogous to making it illegal to break into a house using a tool,
the primary purpose of which is to break into houses.142
Courts also recognize that password protection schemes qualify as technological protection measures. The Second Circuit in Corley noted that password protection schemes are technological measures within the meaning of
the DMCA.143 Two California district courts have ruled that CAPTCHA
routines, which are designed to ensure that only human users—and not automated or robot programs—are technology protection measures.144 For instance, in Craigslist v. Naturemarket, Craigslist sued the operators of Power
posting.com for enabling users to automate their classified advertising by
quantity, frequency, and location.145 The district court held that Power
posting.com’s automated software circumvented Craigslist’s CAPTCHA
routine.146
District courts in New York and Ohio have also held password protection schemes to be technological measures in two cases, although neither
141
144 Cong. Rec. S11887-01 (daily ed. Oct. 8, 1998).
S. Rep. No. 105-190 at 11 (1998) (footnote omitted).
143
Universal City Studios, Inc. v. Corley, 273 F.3d 429, 435 (2d Cir. 2001).
144
Craigslist, Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039, 1056 (N.D.
Cal. 2010) (holding that the defendant’s posting programs had illegally circumvented Craigslist CAPTCHA program by automatically posting classified advertisements on Craigslist.com); Ticketmaster L.L.C. v. RMG Techs., Inc., 507 F. Supp.
2d 1096, 1112 (C.D. Cal. 2007) (holding that the defendant’s internet browser tool
was used to illegally circumvent Ticketmaster’s CAPTCHA program to purchase
large quantities of tickets). Plaintiffs in both cases also had explicit terms of use on
their respective websites forbidding the specific type of circumvention alleged in
each.
145
Craigslist, 694 F. Supp. 2d at 1048–49.
146
Id. at 1056.
142
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227
court found that these schemes were circumvented.147 In the New York
case, an advertising tracking service that sold its product through a password-protected website to clients sued a competitor for using a password
obtained from a third party to copy components of its tracking service.148
The Southern District of New York acknowledged that password protection
schemes could be technological measures.149 However, the court declined to
find a section 1201 violation because the “[d]efendant did not surmount or
puncture or evade any technological measure to [access the plaintiff’s protected webcite]; instead, it used a password intentionally issued by [the]
plaintiff to another entity.”150 An Ohio district court followed its New
York counterpart’s reasoning in a data-processing software case.151 In that
case, a credit union gave the password it used to access a data-processing
software system to a vendor developing a competing system; the dataprocessing software company sued.152 The Ohio court found that the credit
union “did not circumvent or bypass any technological measures of the
[plaintiff’s] software—it merely used a username and password—the approved methodology—to access the software.”153
One possible way to reconcile the different results between the
CAPTCHA and password protection cases is to interpret circumvention as
including only acts that are characteristically automated or non-human interactions. However, such an interpretation is not explicit in either the
plain language of the statute or the congressional record.
The key to finding circumvention is not the technological nature of the
access, but whether the access was authorized. A device circumvents a technological measure if it “descramble[s] a scrambled work, . . . decrypt[s] an
encrypted work, or otherwise . . . avoid[s], bypass[es], remove[s], deactivate[s], or impair[s] a technological measure, without the authority of the copyright owner. . . .”154 Consistently, the Southern District Court of New York
in Reimerdes emphasized that decryption or avoidance of an access control
147
See R.C. Olmstead, Inc. v. CU Interface, LLC, 657 F. Supp. 2d 878 (N.D.
Oh. 2009); I.M.S. Inquiry Mgmt. Sys., Ltd. v. Berkshire Info. Sys., Inc., 307 F.
Supp. 2d 521 (S.D.N.Y. 2004).
148
I.M.S. Inquiry, 307 F. Supp. 2d at 523.
149
Id. at 531.
150
Id. at 532–33.
151
R.C. Olmstead, 657 F. Supp. 2d at 889.
152
See id. at 884.
153
Id. at 889.
154
17 U.S.C. § 1201(a)(3)(A) (2006) (emphasis added).
228
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measure is not circumvention unless it is also unauthorized.155 The object of
the authorization is the access-control technology, not the usage rights
granted by the copyright holder to users. The proper question to be asked
is: Did the copyright holder give authorization to circumvent the access
control? In reviewing the Reimerdes decision, the Second Circuit agreed that
while the purchaser of a DVD has the authority of the copyright owner to
view the DVD, the authority for decrypting the DVD’s CSS control using
nonlicensed software cannot be implied from such purchase.156 Therefore,
purchase alone does not imply authorization to circumvent an access control.
In Craigslist and Ticketmaster, two California district courts correctly
focused on the issue of authorization to the access control technology.157 For
example, Craigslist’s website’s terms of use explicitly forbade automated circumvention of its live posting functionality.158 The court based Powerposting.com’s violation on that explicit denial of authorization.159 Further, the
fact that postings were a generally permitted use was not material in the
court’s analysis. This interpretation is consistent with the Reimerdes court’s
reasoning in which authorization for a consumer to decrypt and view the
DVD using a licensed DVD player did not imply authorization for the defendant to post the circumventing DeCSS code on a website.160
Some courts have, however, incorrectly focused on authorization for
consumer use instead of analyzing whether the access control was circumvented without authorization, explicit or otherwise.161 When a court confuses authorization for bypassing an access-control technology with
authorization for use, it amounts to an additional requirement of underlying
infringement that is contrary to the plain language of the DMCA. The
Federal Circuit’s opinion in Chamberlain reflected this confusion when it de155
Universal City Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294, 317 n.137
(S.D.N.Y. 2000), aff’d, 273 F.3d 429 (2d Cir. 2001).
156
Universal City Studios, Inc. v. Corley, 273 F.3d 429, 444 (2d Cir. 2001).
157
See Craigslist, Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039, 1056 (N.D.
Cal. 2010); Ticketmaster L.L.C. v. RMG Techs., Inc., 507 F. Supp. 2d, 1096, 1112
(C.D. Cal. 2007). It should be noted that neither the New York nor the Ohio
district courts in I.M.S. Inquiry and R.C. Olmstead, analyzed the correct issue–authorization for circumvention of an access control–but instead analyzed the
inappropriate issue of authorization for use.
158
Craigslist, 694 F. Supp. 2d at 1048.
159
Id. at 1056.
160
See Corley, 273 F.3d at 444 (reviewing the Reimerdes decision).
161
See, e.g., Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178,
1193 (Fed. Cir. 2004) (suggesting that proof of authorized usage, or copying of a
software in that case, is an element of an anticircumvention claim).
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229
clared that “[d]efendants who traffic in devices that circumvent access controls in ways that facilitate infringement may be subject to liability under
§ 1201(a)(2). . . . [And] defendants whose circumvention devices do not
facilitate infringement, are not subject to § 1201 liability.”162 If the Federal
Circuit meant that evidence of actual infringement was required, the requirement would be at odds with congressional intent and the vast majority
of opinions dealing with paragraph (a)(2). While the majority of courts have
upheld the requirement that the protection measure must control access to a
copyrightable work, no other court has also required an underlying infringement. The confusion over authorization for use versus circumvention is also
reflected in a circuit split related to the requirement of an underlying infringement. Unlike the Federal Circuit, the Second Circuit,163 along with
the Ninth Circuit, do not require an underlying infringement to bring an
(a)(2)(A) cause of action. In MDY Industries, the Ninth Circuit observed that
two of the acts listed in paragraph (a)(3)(A), which defines circumvention,
do not necessarily result in infringing activity.164 Both descrambling and
decrypting may permit non-infringing viewing of protected works without
permitting infringing distributing or copying. The Ninth Circuit was,
therefore, satisfied that Congress did not intend an infringement nexus.165
3. Effectively Controls Access
A plaintiff must prove that the technological protection measure employed “effectively controls access to a work protected under this title.”166
A measure effectively controls access when, “in the ordinary course of its
operation, [it] requires the application of information, or a process or a treat162
Id. at 1195 (emphasis added). The Federal Circuit rejected Chamberlain’s
assertion that it had not provided Skylink with permission because it rested on the
faulty underlying assumption that “Chamberlain is entitled to prohibit legitimate
purchasers of its embedded software from ‘accessing’ the software by using it.” Id. at
1202 (emphasis added). This is further evidence of the Federal Circuit’s confusing
of authorization for consumer use with authorization for Skylink’s access. See id. at
1202.
163
In Reimerdes, the New York district court observed, “Whether defendants did
so in order to infringe, or to permit or encourage others to infringe, copyrighted
works in violation of other provisions of the Copyright Act simply does not matter
for purposes of Section 1201(a)(2).” Universal City Studios, Inc. v. Reimerdes, 111
F. Supp. 2d 294, 319 (S.D.N.Y. 2000), aff’d, 273 F.3d 429 (2d Cir. 2001).
164
2011).
165
Id.
166
17 U.S.C. § 1201(a)(2)(A) (2006); Chamberlain, 381 F.3d at 1202.
230
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ment, with the authority of the copyright owner, to gain access to the
work[s].”167
In Lexmark v. Static Control Components, the Sixth Circuit interpreted
“effectively controls access” to mean that the access control must directly
protect the copyrightable work and not a function.168 The court declined to
find an (a)(2) violation for a program that controlled access to use of a
printer without controlling the literal copyrightable software code in the
program.169 But the court confused its explanation when it stated that restricting one avenue while leaving another wide open rendered the program
ineffective and thus outside the scope of DMCA protection.170 Under this
reading of “effectively,” only one form of access to material is controlled, or
access is controlled to only a certain subset of people, the partial access control would not be protectable under the DMCA.
The Ninth Circuit offers some clarity here. It interpreted “effectively”
to mean that the access control measure must protect the copyrighted work
consistently in terms of both a spatial and temporal connection between the
access control measure and the work being protected.171 In the case of the
component non-literal elements of the computer game World of Warcraft,
such as its visual and aural parts, the Ninth Circuit held that Warden, the
asserted access control, was ineffective because a player could access them at
any time without encountering Warden.172
However, Warden was an access control within the meaning of the
DMCA for the game’s dynamic non-literal elements, such as the game experience, because a player encountered it, albeit not always, during play.173
Both the Sixth and Ninth Circuits seem to be saying that the access control
measure must be consistently connected to the copyrightable work in order
to meet the effectiveness standard. The Sixth Circuit’s example of leaving
167
§ 1201(a)(3)(B).
Lexmark Int’l, Inc. v. Static Control Components, Inc., 387 F.3d 522, 546
(6th Cir. 2004).
169
Id. at 546–47.
170
Id. at 547 (explaining that “the DMCA not only requires the technological
measure to ‘control[ ] access’ but also requires the measure to control that access
‘effectively,’ and it seems clear that this provision does not naturally extend to a
technological measure that restricts one form of access but leaves another route wide
open”) (citations omitted).
171
See MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 953–54 (9th
Cir. 2011).
172
Id. at 952.
173
Id. at 954
168
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231
the back door open while locking the front door174 would be a better explanation reframed as expecting the entire house to be protected when only a
door to an inside room had been locked.
Further, courts have clarified that the phrase “effectively controls access
to a work” does not require that the protection be sufficiently strong or even
actually work; rather, a protection effectively controls access if its function is
to control access.175 Therefore, whether the password-protection scheme is
technically the strongest or the best type of measure that could control access is immaterial in the analysis.
The Second Circuit in Corley and the district courts in Craigslist and
Ticketmaster emphasized that a measure is an access control when it literally
prevents a user from experiencing or perceiving the site “in the ordinary
course of operation.”176 These courts did not impose additional requirements, such as the protection being consistently operational177 or that no
other backdoor means of access exist.178 For example, the Craigslist court
held that a CAPTCHA scheme protected copyrightable material by virtue of
simply controlling access to experiencing the website in general.179
4. A Copyrighted Work
The antitrafficking provision applies to “work[s] protected under this
title.”180 Accordingly, the Federal Circuit has clarified that anticircumvention technologies are only implicated if they “bear a reasonable relationship
to the protections that the Copyright Act otherwise affords copyright owners.”181 In Chamberlain, the Federal Circuit correctly declined to extend the
reach of the DMCA to products that had an indirect connection to copyrightable subject matter by virtue of having software simply embedded
174
See supra note 170
E.g., Universal City Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294, 318
(S.D.N.Y.), aff’d, 273 F.3d 429 (2d Cir. 2001).
176
See also 17 U.S.C. § 1201(a)(3)(B) (2006).
177
See MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 953–54 (9th
Cir. 2011).
178
See Lexmark Int’l, Inc. v. Static Control Components, Inc., 387 F.3d 522,
547 (6th Cir. 2004).
179
Craigslist, Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039, 1056 (N.D.
Cal. 2010).
180
§ 1201(a)(2)(A)
181
Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1202 (Fed.
Cir. 2004).
175
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somewhere in a product.182 However, the court went too far in requiring an
infringement nexus for a 1201(a)(2) claim.183 The Federal Circuit also stated
that (a)(2) liability could not attach without the existence of (a)(1) liability,
much like contributory infringement cannot exist without direct infringement.184 But an (a)(2) violation does not require an underlying act of copyright infringement per the plain language of the statute. Additionally,
there is nothing in the statute to justify the analogy to contributory
liability.185
The Federal Circuit’s real concern in Chamberlain was to prevent a
plaintiff from using the DMCA to make an end-run around the doctrine of
copyright misuse and antitrust law.186 In Chamberlain, a garage door manufacturer sought an injunction against the maker of a universal transmitter,
Skylink, on grounds that Skylink had impermissibly used Chamberlain’s
“rolling code” to enable its transmitter to be used with Chamberlain’s garage door opener.187 The court held that no DMCA violation had occurred
because the circumventing access by a competitor’s garage door opener was a
legitimate use and did not infringe on a right protected under the Copyright
Act.188 It therefore foreclosed severing “access” from “protected right” out
182
Id.
Id. at 1195.
184
Id. at 1196 n.13.
185
See supra note 122.
186
Chamberlain had made the argument that the DMCA now made all uses of
products containing copyrighted software to which a technological measure controlled access per se illegal unless the manufacturer provided consumers with explicit
authorization. The Federal Circuit observed that Chamberlain’s interpretation
would grant manufacturers broad exemptions from both the antitrust laws and the
doctrine of copyright misuse:
In a similar vein, Chamberlain’s proposed construction would allow any
manufacturer of any product to add a single copyrighted sentence or
software fragment to its product, wrap the copyrighted material in a trivial
“encryption” scheme, and thereby gain the right to restrict consumers’
rights to use its products in conjunction with competing products. In
other words, Chamberlain’s construction of the DMCA would allow virtually any company to attempt to leverage its sales into aftermarket monopolies–a practice that both the antitrust laws and the doctrine of copyright
misuse normally prohibit. Chamberlain, 381 F.3d at 1201 (footnote omitted) (citations omitted).
187
See Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1183
(Fed. Cir. 2004).
188
Id. at 1201–03.
183
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233
of a broader concern for allowing an end-run around antitrust and copyright
misuse laws.189
The Sixth Circuit’s denial of a DMCA claim in Lexmark may have been
informed by similar policy concerns. The court was concerned about permitting a printer manufacturer to use the DMCA to lock up its market for
toner cartridges. However, the Sixth Circuit denied Lexmark’s claim on the
narrower grounds that no access control had been circumvented.190 The
court found that Lexmark’s Printer Engine Program simply did not control
access to the literal code of the program; rather, it was the act of purchasing
a Lexmark printer that controlled this access.191 The court reasoned that
because anyone who purchased the printer could access the literal code, no
access control had been circumvented.192
E. Overview of Fair Use Case Law
Section 107 identifies four factors to be used to determine whether a
use is exempted as fair use. The first factor relates to the purpose and character of the use, including whether it is of a commercial nature or for nonprofit, educational purposes.193 The Supreme Court has clarified that the
key “is not whether the sole motive of the use is monetary gain but whether
the user stands to profit from exploitation of the copyrighted material without paying the customary price.”194
The second factor, the nature of the copyrighted work, “calls for the
recognition that some works are closer to the core of intended copyright
protection than others, with the consequence that fair use is more difficult
to establish when the former works are copied.”195
The third factor is “the amount and substantiality of the portion used
in relation to the copyrighted work as a whole.”196 The amount used in
percentage terms alone does not determine the outcome.197 Qualitative con189
Id.
Lexmark Int’l, Inc. v. Static Control Components, Inc., 387 F.3d 522,
546–47 (6th Cir. 2004).
191
Id.
192
Id.
193
17 U.S.C. § 107(1)(1994).
194
Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 562 (1985).
195
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 586 (1994).
196
§ 107(3).
197
See Campbell, 510 U.S. at 586.
190
234
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siderations also matter.198 For example, a major proportion of the copyrighted work may be fairly used in a parody owing to the very nature of
parody.199 But the same proportion excerpted for another type of use may
not.200
The final factor, the effect of the use upon the potential market for or
value of the copyrighted work, requires asking “‘whether unrestricted and
widespread conduct of the sort engaged in by the defendant . . . would result
in a substantially adverse impact on the potential market’ for the
original.”201
In Chamberlain, the Federal Circuit expressed several concerns about
giving content owners the unlimited right to hold circumventers liable even
for content that was fairly accessible to the public.202 One of those concerns
was about the vast right it would give copyright owners “through a combination of contractual terms and technological measures, to repeal the fair use
doctrine with respect to an individual copyrighted work.”203
The Ninth Circuit recently expressly disagreed with the Federal Circuit’s listing of concerns, including those surrounding the locking up of fair
use.204 It criticized the Federal Court for going beyond the plain language
of the statute to reach policy judgments best left to Congress.205
Despite that disagreement, courts have generally declined to immunize
device manufacturers from circumvention liability on the basis of individual
users’ fair use rights.206 Case law supports the principle that a circumvention device is illegal even if it restricts some fair uses, as long as fair use
avenues are still otherwise available to a user.207 In United States v. Elcom, the
court found that the defendant had violated the DMCA by manufacturing
198
See id. at 587.
See id. at 588–89.
200
See id.
201
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 590 (1994) (citing 3 M.
Nimmer & D. Nimmer, Nimmer on Copyright § 13.05[A][2] (1993)).
202
Cir. 2004).
203
Id. at 1202.
204
MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 948-50 (9th Cir.
2011).
205
Id. at 950.
206
See e.g., Universal City Studios, Inc. v. Corley, 273 F.3d 429, 443 (2d Cir.
2001); United States v. Elcom, Ltd., 203 F. Supp. 2d 1111, 1123–24 (N.D. Cal.
2002).
207
This principle has been seen in several key anti-circumvention cases, including Universal Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294 (S.D.N.Y. 2000);
199
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235
and marketing software that allowed users to disable the plaintiff’s eBook
controls on copying and printing.208 Finding that fair use was not affected,
the court in Elcom explained that while “[t]he fair user may find it more
difficult to engage in certain fair uses with regard to electronic books, . . .
fair use is [nevertheless] still available.”209 For instance, users could conceivably make screen captures of eBook content or they could manually copy
excerpts from the book for their fair use purposes, among other ways.
IV. WHEN A NEWS AGGREGATOR DISTRIBUTES A NEWS
WEBSITE ’S PASSWORD -PROTECTED CONTENT ,
DOES SUBSECTION (a)(2)(A) APPLY ?
A. § 1201(a)(2)(A) Analysis
1. Offer, Provide Or Otherwise Traffic In Any Technology
A news aggregator’s automated technology for reading a news website’s
RSS210 feed content is likely to qualify as “any technology”211 within the
meaning of the DMCA. RSS is a web-based technology that allows the
syndication of online content, hyperlinks, and other information.212 Commonly found on websites generally, RSS feeds enable news websites to make
their content available to a wide variety of standalone newsreaders or webbased portals.213 For consumers, RSS feeds offer the convenience of content
customized to their interests. They can set their browsers and mobile devices to fetch and display RSS feed content according to their individual
preferences.214 While individuals often use newsreaders, like Google
Reader, to access RSS feed content individually, a news aggregator like
Corley, 273 F.3d 429; and 321 Studios v. MGM Studios, Inc., 307 F. Supp. 2d 1085
(N.D. Cal. 2004).
208
Elcom, 203 F. Supp. 2d at 1123–24.
209
Id. at 1134-1135; see also Corley, 273 F.3d at 459 (“Fair use has never been
held to be a guarantee of access to copyrighted material in order to copy it by the
fair user’s preferred technique or in the format of the original.”)
210
RSS stands for Really Simple Syndication.
211
17 U.S.C. § 1201 (a)(2) (2006).
212
John N. Malala, Upshot of RSS Technology on Website Promotion, 2 J. Website
Promotion 5, 6 (2006).
213
See id.
214
Id.
236
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Google News fetches and displays information for larger audiences.215 The
displayed content can take the form of headlines, abstracts, full-text articles,
or links. The news aggregator’s automated software for fetching content
from source news websites and its subsequent display of that content on its
own web portal or standalone newsreader is the technology implicated in
this analysis. The antitrafficking provision is in play if the news aggregator
“presents, holds out or makes a circumvention technology . . . available,
knowing its nature, for the purpose of allowing others to acquire it.”216 If
the news aggregator’s automated technology of fetching and displaying content in a web-based or standalone application can be acquired by others, it is
sufficient to bring it within the scope of subsection (a)(2).217
2. Primarily Produced For Circumventing A Technological Measure
A news website must also show that the news aggregator’s automated
fetch and display technology is primarily designed to bypass its own technology protection measure: a password protection scheme.218 The case law,
which is buttressed in explicit legislative history, squarely supports the conclusion that a news website’s password protection scheme can be a technology protection measure within the meaning of the DMCA.219
However, courts are likely to diverge on the question of whether the
aggregator’s fetch and display technology rises to the level of circumvention.
Jurisdictions following the I.M.S. Inquiry and R.C. Olmstead line of cases may
decline to find circumvention where a news aggregator did not “surmount
or puncture or evade” a technological measure.220 After all, a person representing the news aggregator could simply set up a password-protected account to gain legitimate access to the website’s content. The news
aggregator’s access, thereafter, for automated aggregation purposes would be
unlikely to constitute circumvention because no technology measure had to
be evaded.
215
216
See infra p. 238.
See Universal Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294, 325 (S.D.N.Y.
2000).
217
See id.
17 U.S.C. § 1201(a)(2)(A) (2006).
219
See supra p. 234.
220
I.M.S. Inquiry Mgmt. Sys., Ltd. v. Berkshire Info. Sys., Inc., 307 F. Supp. 2d
521, 531-32 (S.D.N.Y. 2004); R.C. Olmstead, Inc. v. CU Interface, LLC, 657 F.
Supp. 2d 878, 889 (N.D. Oh. 2009).
218
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237
The key to finding circumvention, as explained in subsection (a)(3)(A),
is whether access was authorized.221 However, a news website’s anticircumvention claim against a news aggregator should not be disallowed on the
basis of lack of authorization for a consumer’s use, because this view is unsupported in the plain language of the statute. The proper basis is the absence of authorization for circumvention of an access control.222
Jurisdictions choosing to follow the Federal Circuit would not find circumvention where users had the authority to otherwise use the news website’s
content.223 But the Second224 and Ninth225 Circuits would not require proof
of underlying infringement, only that an access control that prevented a user
from perceiving a site was circumvented.
Further, jurisdictions following the Craigslist and Ticketmaster line of
cases would find circumvention where an explicit term of use on a website
prohibited the news aggregator’s specific type of access.226 Assuming there
is an explicit lack of authorization for automated fetch and display technologies of news aggregators, DMCA liability would attach on the circumvention element.227
News websites commonly publish RSS feeds that RSS readers like
Google Reader can read for personal, noncommercial use. The New York
Times website, www.NYTimes.com, provides an example. Its RSS page contains the following terms to emphasize the noncommercial scope of its
permission:
Terms & Conditions: We encourage the use of NYTimes.com RSS feeds
for personal use in a newsreader or as part of a non-commercial blog. We
require proper format and attribution whenever New York Times content
is posted on your web site, and we reserve the right to require that you
221
See supra p. 227.
See § 1201(a)(3)(A).
223
See Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1193
(Fed. Cir. 2004).
224
Universal City Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294, 319, aff’d,
273 F.3d 429 (2d Cir. 2001).
225
2011).
226
See, e.g., Craigslist Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039,
1048–49 (N.D. Cal. 2010) (enjoining defendant powerpostings.com from facilitating automated ad postings on craigslist.com in violation of the site’s terms of use
forbidding unauthorized automated postings).
227
See, e.g., id.; Ticketmaster L.L.C. v. RMG Techs., Inc., 507 F. Supp. 2d 1092,
1112 (C.D. Cal 2007).
222
238
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cease distributing NYTimes.com content. Please read the Terms and Conditions for complete instructions.228
A newsreader, in contrast to a news aggregator, is a standalone or web-based
portal that allows a user to receive organized and personalized information
according to his or her preferences.229 News aggregators often populate
their sites using the same RSS feed code prepared by news websites for use
with a newsreader.230 While newsreaders and aggregators function in the
same manner and deliver similar benefits of organization and convenience,
they are substantially different. A newsreader is used by individuals to receive personalized news content.231 A news aggregator, on the other hand, is
a commercial entity that gathers content to attract a large number of individuals, typically deriving revenue directly or indirectly from the resulting
traffic.232
While the explicit grant of permission by www.NYTimes.com for personal use in a newsreader explicitly precludes commercial use by blogs,
many other news websites do not have similarly explicit terms.233
The existence of the password protection scheme alone may not be a
sufficient basis for a court to find an implied lack of authorization for news
aggregators within the meaning of the anticircumvention provisions. In
Chamberlain, the Federal Circuit affirmed the district court’s finding that
unconditioned sales by a maker of garage door openers implied authorization
for a competitor to sell a compatible transmitter because it never restricted
its customers’ use of competing transmitters.234 The district court declined
to read an implicit restriction from the absence of any discussion of competing products on the plaintiff’s website.235 A news website must present evidence of additional explicit terms prohibiting news aggregator access in its
228
RSS, N.Y. Times, available at http://www.nytimes.com/services/xml/rss/index.html (emphasis added). The detailed Terms and Conditions page referenced expands on terms for individual use and does not explicitly address authorization (or
nonauthorization) for commercial news aggregators. RSS Terms and Conditions, N.Y.
Times, available at www.nytimes.com/services/xml/rss/termsconditions.html.
229
Annette Lamb & Larry Johnson, Web Feeds Delivered To Your Digital Doorstep,
36 Tchr. libr. 66, 66 (2009).
230
Id.
231
Id.
232
See Netanel, supra note 2, at 979.
233
See e.g., Wash Post, http://www.washingtonpost.com (last visited Apr. 14,
2011) (website does not contain similar terms of use for its RSS feeds).
234
Cir. 2004).
235
Id.
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239
website’s terms of use to meet the DMCA’s authorization test. A showing of
explicit terms of use that prohibit aggregators from harvesting its news content for commercial purposes may prove that a news aggregator’s use of the
password protection system is unauthorized.
3. Effectively Controls Access
The case law is mixed here on the question of whether password protection “effectively controls access”236 to a news website’s content. A jurisdiction following the Sixth Circuit’s reasoning in Lexmark may hold that the
password protection scheme does not effectively control access to the news
website’s content because it does not raise a specific barrier against automated access by the news aggregator’s software. For one, a password control
measure is designed to allow access to individuals who create user accounts
with the news website. Anyone can obtain and use the same content by
simply going online and creating a password-protected account for instance.237 Where one avenue of access is controlled but another is unrestricted, a court following the Lexmark line of reasoning could conclude
that the password protection scheme did not effectively control access.
However, Lexmark’s reasoning should not be interpreted to require a
qualitatively effective access control, as clarified by the Ninth Circuit in
Blizzard. Such a requirement is not evident in the plain language of the
statute. And, as the Reimerdes court recognized, if the DMCA could only be
applied where protection was always effective, it would lead to the absurd
result of the law offering protection in situations where it was least needed
and withholding it where it was most essential.238 It is because access controls are inevitably breached that piracy exists in the first place. Like the
Second Circuit in Corley and the district courts in Craigslist and Ticketmaster,
a court should view a news website’s password scheme to be an access con236
See 17 U.S.C. § 1201(a)(2)(A) (2006).
See Lexmark Int’l, Inc. v. Static Control Components, Inc., 387 F.3d 522,
546–47 (6th Cir. 2004).
238
Declining to adopt the defendant’s view of “effectively controls,” the
Reimerdes court explained:
[d]efendants’ construction, if adopted, would limit the application of the
statute to access control measures that thwart circumvention, but withhold
protection for those measures that can be circumvented. In other words,
defendants would have the Court construe the statute to offer protection
where none is needed but to withhold protection precisely where protection is essential. Universal City Studios, Inc. v. Reimerdes, 111 F. Supp.
2d 294, 318, aff’d, 273 F.3d 429 (2d Cir. 2001).
237
240
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trol because it literally prevents a user from experiencing or perceiving the
site “in the ordinary course of its operation.”239
4. A Copyrighted Work
The news industry’s products are undoubtedly works protected under
the Copyright Act. In contrast, the Sixth Circuit’s decision favoring the
defendant in Lexmark largely rested on the fact that the product implicated
simply was not a subject of the Copyright Act: a functional lock-out code for
toner cartridges.240 The Sixth Circuit may have been concerned about permitting a printer manufacturer to use the DMCA to lock up its market for
toner cartridges.241 Lexmark ostensibly argued that the defendant toner cartridge manufacturer had unlawfully gained access to its copyrighted Printer
Engine Program, which checked toner levels before allowing access to
printer functions.242 Lexmark’s real purpose was to prevent rival toner cartridge manufacturers from marketing refurbished Lexmark toner cartridges
without payment to Lexmark.243 Here, there is no similar concern of misusing copyright law to control markets for products unrelated to the Copyright Act. This critical distinction ought to weigh in the news industry’s
favor.244
B. Fair Use Analysis
News aggregators will inevitably raise a fair use defense. They are
likely to argue that it is common practice for bloggers and news aggregators
to repurpose and republish news content for commercial purposes without
attribution or payment.245 Attributor Corporation’s Fair Syndication Consortium found that, in just one month in 2009, over 75,000 unlicensed
websites had reused U.S. newspaper content.246 Nearly 112,000 unlicensed
239
§ 1201(a)(3)(B).
Lexmark, 387 F.3d at 529.
241
See id.
242
Id.
243
See id. at 530–31.
244
See 17 U.S.C. § 1201(a)(2)(A) (2000) (stating that liability attaches only
when “a work protected under this title” is implicated).
245
Netanel, supra note 2, at 978–79.
246
Fair Syndication Consortium, Fair Syndication Consortium Research Brief: How
U.S. newspaper content is reused and monetized online, Attributor (Dec. 1, 2009), Link
to report available at http://www.attributor.com/index.php/blog/2009/12/01/9newspaper-content-matters
240
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241
full copies of news articles were detected during the study, with Google and
Yahoo! ad networks commercializing the largest share of such content.247
Such re-use arguably deserves fair use protection because it promotes important fair use values. A key inquiry will therefore be to determine whether
such re-use and repurposing, when conducted by commercial news aggregators, constitutes fair use.
A news aggregator’s argument based on protection of individual users’
fair use rights will not immunize it from circumvention liability.248 Further, drawing a parallel between news aggregators’ use of news content to
search engines’ use of the same content on valuable fair use grounds will be
unlikely to withstand close examination. Courts have exempted the cataloging of digital content by search engines from copyright liability on fair use
grounds, even when the content is cataloged for commercial purposes.249
Although a search engine, like Google, may sell advertising based on search
terms resulting in the display of copyrighted news articles, the search engine’s commercialization of news content nevertheless outweighs a plaintiff’s
copyright interest. The key to the search engine fair use conclusion is the
transformative value of the indexing and information-location functions to
the public, which cannot be accomplished by individuals in any other way.
But even the Senate Committee on the Judiciary noted that search engines
could be “obvious infringe[rs]” if their links to infringing sites reflected
actual knowledge of infringement and their use went beyond mere indexing
to qualify as fair use.250 News aggregators like Google News or Yahoo! News
may similarly be found to be obvious infringers if the news aggregation
operation itself is purposefully designed to distribute another news source’s
access-controlled content to the subscriber without authorization or
payment.
247
Id.
See, e.g., Universal City Studios, Inc. v. Corley, 273 F.3d 429, 443 (2d Cir.
2001) (clarifying that § 1201(c)(1) targets the act of circumvention and not the use
of the materials after the circumvention has occurred); United States v. Elcom Ltd.,
203 F. Supp. 2d 1111, 1123–25 (N.D. Cal. 2002) (explaining that an individual
user is permitted to circumvent for the purposes of engaging in fair use, but that
trafficking in tools that allow fair use circumvention is unlawful).
249
See, e.g., Kelly v. Arriba Soft Corp., 336 F.3d 811, 818–20 (9th Cir. 2003)
(reasoning that a search engine’s commercial use of thumbnail images of a photographer’s portfolio was sufficiently transformative because it enhanced the public’s ability to gather information without superseding the photographer’s purpose for the
original content).
250
S. Rep. No. 105-190, at 43–45, 57–58 (1998).
248
242
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Further, if news aggregators did not exist, individual fair use for the
purpose of accessing, customizing, and organizing news content to stay informed would not be affected. The commercial news aggregator is not the
only way for users to access, organize or customize news content for fair use
purposes. Individuals retain these abilities because they can still use personal newsreaders or directly visit the news website.
As in Elcom, fair users will not be precluded from making fair uses of
news content if commercial news aggregators are enjoined from marketing
their services to consumers.251 An injunction on news aggregators would
not restrict an individual’s ability to make fair use of news content by other
means, such as simply registering with the site to access the content directly. It is, therefore, conceivable that a news website’s 1201(a)(2(A) claim
will not have to yield to the commercial news aggregators’ fair use defense.
Ultimately, however, judges retain the power to interpret the statute in
the context of the rules of statutory interpretation while continuing to draw
upon the rich body of common law related to fair use. As Nimmer observed, judges adhering to a textualist view could theoretically defend a fair
use exemption to the DMCA just as easily as judges wishing to discount it
could invoke their common law powers to do so.252
V. CONCLUSION
The acute tensions between the rights of content producers and the fair
use rights of users that dominated the conversation leading up to the enactment of the DMCA continues play out in parallel debates regarding online
news content. Today, advancements in technology that permit the distribution of content on a pay-per-use basis have the potential to achieve a new
balance between news content producers and users. The same technological
advancements could permit the efficient administration of fair use exceptions on an individual basis.
The DMCA as currently drafted provides a legitimate way to prevent
and remedy losses incurred by the news industry from the unauthorized distribution of its content. In particular, bypassing a news website’s password
protection scheme to automatically harvest news content may produce a
valid 1201(a)(2)(A) claim against a commercial news aggregator. Many
news websites already employ password-protected accounts with CAPTCHA
routines to verify that the users are human. With or without CAPTCHA,
these schemes are technological measures within the meaning of the DMCA.
251
252
See Elcom, 203 F. Supp. 2d at 1123–24.
Nimmer, supra note 89, at 979–981.
R
unknown
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13-MAR-12
9:32
243
News aggregators that bypass these routines to harvest content may be liable for circumvention under 1201(a)(2)(A) if such circumvention is demonstrably unauthorized. If a news aggregator used a legitimately issued
password to access, harvest and republish a news website’s content when
such use was expressly prohibited in the site’s terms of use, as had been done
by the plaintiff in Craigslist, it would most likely be actionable under
1201(a)(2)(A) of the DMCA.
The Federal Circuit would require absence of authorization for use as
well as circumvention for a DMCA claim to be sustained in favor of a news
website plaintiff. The Second and Ninth Circuits, in contrast, would require
absence of authorization for only circumvention for a DMCA claim to stand.
In virtually all circuits a news aggregator’s fetch and display technology is
unlikely to rise to the level of circumvention of a news website’s password
protection scheme without the explicit withholding of authorization for
such circumvention.
Fair use is unlikely to sustain a news aggregator’s defense, especially in
circuits where authorization is viewed as pertaining strictly to circumvention, i.e., where authority to circumvent was not explicitly granted by the
copyright owner. In circuits that interpret authorization to encompass authority for use, fair use may present a stronger defense. But where fair use of
the material is not wholly limited by an anti-circumventing technology,
courts generally are unlikely to find fair use to be unreasonably restricted.
If the fair use forces that prompted the news content horse to leave the
barn can be efficiently managed through technology, deploying the DMCA
to secure the barn door locks may become more commonplace in the news
industry.
unknown
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13-MAR-12
9:32

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